US Dollar Index recedes from tops beyond 93.00

  • DXY advances further north of the 93.00 mark on Tuesday.
  • Risk-off mood continues to dominate the sentiment so far this week.
  • Consumer Confidence, Durable Goods Orders, House Price Index next of note.

The greenback, when gauged by the US Dollar Index (DXY), now struggles for direction in the 93.00 neighbourhood following the earlier move to tops in the 93.10/15 band.

US Dollar Index looks to pandemic, data

The index looks to add to Monday’s gains above the 93.00 barrier on turnaround Tuesday and trades closer to the key resistance area near 93.30, where coincide the 55-day SMA and the 6-month resistance line.

In fact, markets’ sentiment remains sour on the back of dying hopes of further fiscal stimulus (at least before the November elections) and the rising spread of the coronavirus pandemic in the US and Europe.

In addition, speculations of a dovish message at the ECB event later in the week have been also sponsoring the resumption of the selling bias in the risk complex.

Later in the NA session, the focus of attention is expected to be on the release of the Consumer Sentiment measured by the Conference Board seconded by Durable Goods Orders, the House Price Index, the Richmond Fed Manufacturing gauge and the API’s weekly report on crude oil stockpiles.

What to look for around USD

The index managed to leave behind the downside pressure observed during last week and has reclaimed the 93.00 barrier and above so far this week. The current recovery in the dollar follows a change of heart among investors in response to the impact of the pandemic on the global growth prospects as well as fading chances of a deal between Democrats and Republicans over a new stimulus bill. However, the view on the buck is expected to deteriorate in case of a “blue wave” following the presidential elections next month, 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 losing 0.04% at 93.03 and faces the next support 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). On the upside, 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).

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