US Dollar Index off highs around 93.80 post-data, looks to ECB

DXY keeps the bid tone unchanged around 93.70.
US advanced Q3 GDP came in at 33.1%, above estimates.
Initial Claims rose at a weekly 751K also beating consensus.

Pablo Piovano FXStreet

The US Dollar Index (DXY), which gauges the greenback vs. a basket of its main rivals, sticks to the positive performance albeit off daily highs near 93.80.

US Dollar Index now looks to ECB

The index stays well bid so far on Thursday on the back of the prevailing risk aversion sentiment in the global markets and always amidst rising pandemic concers.

The dollar also manages to get extra support after flash Q3 GDP figures showed the economy is expected to expand just above 33% during the July-September period, surpassing initial estimates.

Also on the bright side, weekly Claims rose by 751K and extended the drop below the 800K mark for the second week in a row.

Investors’ attention now shifts to the upcoming ECB monetary policy meeting, with consensus so far favouring a dovish tilt in the central bank’s statement.

Still in the US, September’s Pending Home Sales will close the daily calendar.

What to look for around USD

The index managed to regain the area above the key 93.00 barrier so far this week. The current recovery in the dollar comes in response to the impact of the COVID-19 pandemic on the global growth prospects as well as dying chances of a deal between Democrats and Republicans over a new stimulus bill. However, the stance on the dollar is predicted to deteriorate in case Joe Biden wins the November elections, while the “lower for longer” stance from the Federal Reserve also caps occasional bullish attempts.

US Dollar Index relevant levels

At the moment, the index is gaining 0.31% at 93.73 and a break above 93.90 (weekly high Oct.15) would expose 94.20 (38.2% Fibo retracement of the 2017-2018 drop) and finally 94.74 (monthly high Sep.25). On the other hand the next support is located at 92.47 (monthly low Oct.21) followed by 91.92 (23.6% Fibo of the 2017-2018 drop) and then 91.80 (monthly low May 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.

GBP/USD: Downward-sloping trendline near 1.3470 remains key barrier

The British pound faces selling pressure against its major currency peers, trading 0.1% lower at around 1.3420 against the US Dollar during the European trading session on Tuesday.

EUR/USD flatlines above 1.1500, awaits US jobs data

EUR/USD holds steady around 1.1505 in European trading hours on Tuesday. Markets remain cautious ahead of a slew of US jobs data, starting with the JOLTS Job Openings Survey later today. However, the downside appears capped by hot Eurozone inflation in July, bolstering the case for a European Central Bank rate hike at the next meeting.

Gold holds steady above $4,050; hawkish Fed bets favor bearish traders

Gold remains confined in a range below the $4,100 mark through the early European session as traders opt to wait for further developments surrounding the Middle East crisis. Meanwhile, the uncertainty over US-Iran peace talks continues to act as a tailwind for the safe-haven US Dollar.

Aave: Bearish RSI divergence risks a 20% drop despite steady DeFi deposits

Aave (AAVE) extends a mild near-term recovery on Tuesday, holding above its 50-day Exponential Moving Average at $90.80. Aave protocol’s V3 deployment on Monad blockchain recorded over $500 million in deposits over the last month, reflecting increased user adoption.

US JOLTs report in focus

In the US, the June JOLTs report will be in the spotlight. Job openings have increased modestly this year, which has historically predicted rising wage cost pressures ahead. June trade balance data will also be released in the afternoon and the preliminary reading pointed towards a stable trade deficit from May. The Fed's Schmid (non-voter, hawk) will be on the wires overnight.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.