- DXY extends the downside to fresh 3-month lows around 96.40.
- Risk-on sentiment remains on the rise and weighs on the dollar.
- Non-farm Payrolls will be the salient event later in the NA session.
The greenback, when tracked by the US Dollar Index (DXY), remains well on the defensive and is now hovering around 3-month lows near 96.40.
US Dollar Index looks to data, risk appetite
The index is losing ground for yet another session at the end of the week, quickly leaving behind the key support at 97.00 the figure and entering into oversold territory in the mid-96.00s.
The prevailing risk-on sentiment keeps the buck under heavy pressure so far this week, particularly after the ECB increased its stimulus package by an extra €600 billion at its meeting on Thursday. The central bank’s announcement gave extra legs to the rally in the risk complex and motivated USD-bears to increase their presence in the markets.
Later in the NA session, the US monthly labour market report will grab all the attention, with consensus seeing the jobless rate to have ticked higher to nearly 20% during May and the economy to have shed 8 million jobs during the same period.
What to look for around USD
The greenback remains under heavy pressure at the beginning of the month, prolonging the downtrend well below the 97.00 mark and always against the backdrop of the solid pick-up in the appetite for riskier assets. In the meantime, the dollar remains vigilant on the US-China trade front, the gradual return to some sort of normality in the US economy and the broader risk trends as main drivers of the price action. On the constructive stance around the buck, bouts of risk aversion should support the investors’ preference for the greenback as a safe haven along with its status of global reserve currency and store of value.
US Dollar Index relevant levels
At the moment, the index is losing 0.23% at 96.54 and faces immediate contention at 96.44 (monthly low Jun.5) followed by 96.33 (monthly low Dec.31 2019) and then 96.03 (50% Fibo of the 2017-2018) drop. On the upside, a breakout of 97.87 (61.8% Fibo of the 2017-2018 drop) would aim for 98.47 (200-day SMA) and finally 99.02 (100-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
EUR/USD steady below 1.0800 after US PCE meets expectations
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips. Fed Chair Jerome Powell set to speak ahead of the weekly close.
GBP/USD hovers around 1.2620 in dull trading
GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.
Gold price sits at all-time highs above $2,230
Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.