US Dollar Index meets support around 93.00

The greenback, tracked by the US Dollar Index (DXY), trades with modest gains just above the 93.00 mark on turnaround Tuesday.

US Dollar Index focuses on data, pandemic

Despite starting the week on the negative footing, the index manages well to keep business above the key support at 93.00 the figure so far this week.

The index picked up pace earlier in the Asian trading hours following news that Johnson & Johnson (NYSE: JNJ) announced it has paused the study of its COVID-19 vaccine due to an unexplained illness on one of its participants.

Later in the US data space, the focus of attention will be on the release of the September inflation figures measured by the CPI seconded by the NFIB Index and the IBD/TIPP Index.

What to look for around USD

The index stays supported by the 93.00 region so far this week. Occasional bullish attempts, however, are seen as temporary, as the underlying sentiment towards the greenback remains cautious-to-bearish. This view is reinforced by the “lower for longer” stance from the Federal Reserve, hopes of a strong recovery in the global economy, the negative position in the speculative community and political uncertainty ahead of the November elections. The resumption of market chatter surrounding another stimulus package also puts the dollar under extra pressure.

US Dollar Index relevant levels

At the moment, the index is gaining 0.10% at 93.13 and a break above 94.20 (38.2% Fibo retracement of the 2017-2018 drop) would aim for 94.74 (monthly high Sep.25) and finally 94.80 (100-day SMA). On the downside, immediate contention lines up at 92.70 (weekly low Sep.10) followed by 91.92 (23.6% Fibo of the 2017-2018 drop) and then 91.80 (monthly low May 2018).