US Dollar Index gains traction around the 90.00 level

DXY alternates gains with losses around the 90.00 region.
Investors’ focus remains on US yields, politics.
US CPI, Fedspeak, Beige Book next on tap in the calendar.

Pablo Piovano FXStreet

The dollar, when tracked by the US Dollar Index (DXY), looks to leave behind Tuesday’s pullback and keeps gyrating around the 90.00 area on Wednesday.

US Dollar Index looks to data, yields

The index looks to resume the recent upside following Tuesday’s negative price action and after being rejected from so far yearly tops around 90.70 recorded on Monday.

Higher yields in the US 10-year benchmark has been sustaining the recovery in the dollar along with rising concerns over the pick-up in coronavirus cases around the world despite the vaccine rollout. In additon, effervescence in the US political scenario appears to be gaining traction as President elect Biden gets closer to swear as the next US President (January 20th).

In the US docket, December’s inflation figures will take centre stage later in the NA session seconded by the EIA’s weekly report on crude oil inventories and the Fed’s Beige Book.

In addition, St. Louis Fed J.Bullard (2022 voter, dovish), FOMC’s L.Brainard (permanent voter, dovish), Philly Fed P.Harker (2023 voter, hawkish) and FOMC’s R.Clarida (permanent voter, dovish) are all due to speak throughout the session.

What to look for around USD

The index regained buying interest after bottoming out in the 89.20 area in the first trading week of the new year and managed to advance to the proximity of 90.70 so far this week, where some relevant resistance turned up. The recovery in US yields keeps lending support to the greenback as investors continue to perceive a potential pick-up in inflation pressure/expectations in response to the most likely increment in fiscal stimulus under a Democrat White House. However, the outlook for the greenback remains fragile in the short/medium-term for the time being amidst massive monetary/fiscal stimulus in the US economy, the “lower for longer” stance from the Federal Reserve and prospects of a strong recovery in the global economy.

US Dollar Index relevant levels

At the moment, the index is gaining 0.08% at 90.15 and a breakout of 90.72 (2021 high Jan.11) would open the door to 91.01 (weekly high Dec.21) and finally 91.23 (weekly high Dec.7). On the other hand, immediate contention is located at 89.20 (2021 low Jan.6) followed by 88.94 (monthly low March 2018) and the 88.25 (monthly low February 2018).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

Ethereum Price Forecast: BitMine extends ETH buying streak, says long-term outlook remains positive

Ethereum (ETH) treasury firm BitMine Immersion continued its weekly purchase of the top altcoin last week after acquiring 45,759 ETH.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.