US Dollar Index looks for direction near 98.30 ahead of data

The greenback, in terms of the US Dollar Index (DXY), is managing well to keep business in the area of 2-week highs around 98.30 on Tuesday.

US Dollar Index looks to data and trade

The index is navigating the upper end of the recent range around 98.30, although a move further north of the key resistance area in the mid-98.00s seems to need a stronger catalyst.

In this regard, there are no fresh developments from the US-China trade dispute or any progress on the ‘Phase One’ deal other than the usual rhetoric from both countries that a deal is ‘close’.

On another scenario, the greenback is expected to take centre stage later in the day in light of the release of the always-relevant Consumer Confidence gauge by the Conference Board, New Home Sales, the S&P/Case-Shiller index, advanced Trade Balance and Wolesale Inventories.

What to look for around USD

The index keeps the topside well and sound so far this week amidst the noticeable absence of headlines from the trade front. In the meantime, and apart from the trade issue, investors keep monitoring US fundamentals amidst the ‘wait-and-see’ stance from the Fed. Moving to US politics, the Trump’s impeachment process remains underway although with muted impact on the FX space for the time being. On the broader view, however, the outlook on the greenback still looks constructive on the back of a cautious Fed vs. the broad-based dovish stance from its G10 peers, the dollar’s safe haven appeal and the status of ‘global reserve currency’.

US Dollar Index relevant levels

At the moment, the pair is retreating 0.01% at 98.28 and faces the next support at 98.06 (100-day SMA) seconded by 97.68 (low Nov.18) and finally 97.58 (200-day SMA). On the flip side, a breakout of 98.45 (monthly high Nov.13) would open the door to 99.25 (high Oct.8) and then 99.67 (2019 high Oct.1).