US Dollar Index pushes higher and approaches 100.00

The greenback, in terms of the US Dollar Index (DXY), is extending the march north to the vicinity of the key barrier at 100.00 the figure on Monday.

US Dollar Index up on safe haven demand

The index managed to regain poise after last week’s lows in the 99.00 neighbourhood and it is already looking to retest the psychological triple-digit barrier on the back of persistent demand for the safe haven universe.

In fact, renewed and persistent concerns surrounding the US-China trade conflict have been also fuelled by the rising unease in Honk Kong after China announced it plans to implement the security law on the region.

Against this backdrop, the demand for the safe havens remains well and sound for yet another session and is all rendering extra legs to the buck.

In the US, activity is expected to remain in marginal levels, if any at all, following the Memorial Day holiday. Later in the week, the Consumer Confidence by the Conference Board is next on tap on Tuesday, the Fed’s Beige Book on Wednesday, Claims and Durable Goods Orders on Thursday, PCE and the final U-Mich gauge on Friday.

What to look for around USD

The greenback is adding to last week’s gains and is trading at shouting distance from the key 100.00 mark, always sustained by the resumption of the risk aversion in the global markets. In the meantime, the dollar remains vigilant on the US-China trade front and the gradual return to some sort of normality in the US economy. On the constructive stance around the buck, it remains the safe haven of choice among investors, helped by its status of global reserve currency and store of value. The dollar also derived extra support after Fed’s J.Powell recently ruled out negative rates, although he stressed the readiness of the Fed to implement further measures to support the economy.

US Dollar Index relevant levels

At the moment, the index is gaining 0.11% at 99.91 and a break above 100.56 (monthly high May 14) would open the door to 100.93 (weekly/monthly high Apr.6) and finally 101.34 (monthly high Apr.10 2017). On the other hand, the next support emerges at 99.00 (weekly low May 20) followed by 98.97 (100-day SMA) and then 98.48 (200-day SMA).