US Dollar Index pushes higher and flirts with 93.50

DXY clinches 2-day highs in the vicinity of 93.50.
The Chicago Fed index came in below estimates in August.
Focus of attention remains on Powell’s testimonies later in the week.

Pablo Piovano FXStreet

The greenback continues its march north unabated and is now testing fresh 2-day highs in the mid-93.00s when measured by the US Dollar Index (DXY).

US Dollar Index now looks to Powell

The index is up for the second consecutive session on Monday, gathering extra pace on the back of the renewed and quite strong sentiment towards the safe havens.

Also adding to the dollar’s momentum, Atlanta Fed R.Kaplan (voter, hawkish) hinted at the idea of higher rates once the unemployment rate reaches lower levels. However, he said the current ZIRP looks appropriate for the next 2-3 years.

In the docket, the Chicago Fed National Activity Index came in at 0.79 for the month of August, missing consensus and lower than July’s 2.54.

What to look for around USD

The dollar keeps the composure at the beginning of the week and looks to stabilize above the 93.00 yardstick. Occasional bullish attempts in DXY are seen as temporary, however, as the broad-based sentiment towards the greenback remains bearish. This view is reinforced by the “lower for longer” stance from the Federal Reserve, the unremitting advance of the coronavirus pandemic, the negative position in the speculative community and political uncertainty ahead of the November elections.

US Dollar Index relevant levels

At the moment, the index is gaining 0.43% at 93.40 and a break above 93.66 (monthly high Sep.9) would open the door to 93.99 (monthly high Aug.3) and finally 94.20 (38.2% Fibo of the 2017-2018 drop). On the other hand, the next support emerges at 92.70 (weekly low Sep.10) seconded by 91.92 (23.6% Fibo of the 2017-2018 drop) and then 91.75 (2020 low Sep.1).

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.

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