- DXY is up smalls near the 99.00 mark on Wednesday.
- President Trump said some US states could lift restrictions soon.
- Retail Sales, Industrial Production next of relevance in the docket.
The greenback, in terms of the US Dollar Index (DXY), is posting marginal gains around the 99.00 neighbourhood on Wednesday.
US Dollar Index tests the 55-day SMA
The index is recovering some ground lost in the middle of the week following Tuesday’s sharp sell-off to sub-99.00 levels, area coincident with the 55-day SMA. In this regard, further downside could see the critical 200-day SMA re-visited.
In the meantime, price action continues to gyrate around the impact of the COVID-19 on the global economy, with market consensus keeps pointing to a sharp contraction of the activity in the first half of the year followed by a robust recovery in Q3 and Q4.
Moving forward, the release of Retail Sales for the month of March dominates the US calendar seconded by Industrial Production, Capacity Utilization, the NAHB Index, TIC Flows, Business Inventories, the Fed’s Beige Book and the EIA’s weekly report on US crude oil supplies.
In addition, Atlanta Fed R.Bostic (2021 voter, centrist) is due to speak.
What to look for around USD
DXY has started the second consecutive week on a bearish fashion following the recently announced Fed measures and further deterioration of the US labour market. In the meantime, all the attention remains on the COVID-19 amidst countries extending their lockdown periods, speculation of a global recession and further deterioration of fundamentals. On the supportive side for the buck, market participants seem to prefer the dollar vs. other safe havens like the Japanese yen and the Swiss franc in cases when risk aversion kicks in, all helped by its status of “global reserve currency” and store of value.
US Dollar Index relevant levels
At the moment, the index is gaining 0.08% at 98.94 and a break above 100.49 (78.6% Fibo retracement of the 2017-2018 drop) would open the door to 100.93 (weekly/monthly high Apr.6) and then 101.34 (monthly high Apr.10 2017). On the other hand, the next support lines up at 98.82 (monthly low Apr.15) followed by 98.27 (weekly low Mar.27) and finally 98.18 (200-day SMA).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD Price Analysis: Sideways trend continues unfolding
AUD/USD is in a down-leg within a narrow trading range. The pair is probably in a sideways trend with the odds favoring an extension of that trend. A decisive break above or below the top or bottom of the range would generate follow-through targets.
EUR/USD: Central banks’ decisions will keep taking their toll
The EUR/USD pair slid below the 1.0700 mark for the first time in over a month on Friday, as the US Dollar surged on the back of risk aversion. The dismal mood prevailed throughout the week, with a short-lived exception on Wednesday when softer-than-anticipated United States inflation brought a breath of fresh air.
Gold gains ground as traders dial up Fed rate cut bets for September
Gold registered limited gains this week, supported by safe-haven flows and soft inflation data from the US. In the absence of high-impact macroeconomic data releases ahead, investors will pay close attention to technical developments in XAU/USD and comments from Federal Reserve officials.
Bitcoin active addresses hit lowest level in five years, BTC ranges below $67,000
Bitcoin, the largest asset by market capitalization, has noted a decline in its active address count per data from Glassnode. A decline in active addresses is typical at a time during a surge in Bitcoin transaction fees.
Week ahead: RBA, SNB and BoE next to decide, CPI and PMI data also on tap
It will be another central-bank-heavy week with the RBA, SNB and BoE. Retail sales will be the highlight in the United States. Plenty of other data also on the way, including flash PMIs and UK CPI.