US Dollar Index remains firm above the 94.00 mark

DXY navigates withing a side-line theme above 94.00.
US ADP report showed the private sector added 749K jobs.
US Q2 GDP contracted 31.4%, a tad less than estimated.

Pablo Piovano FXStreet

The greenback, when gauged by the US Dollar Index (DXY), keeps the bid tone unchanged above the 94.00 yardstick following US data results.

US Dollar Index stays bid, looks to Payrolls

The index keeps the buying interest well and sound on Wednesday and manages well to keep business above 94.00 the figure following key releases in US calendar.

In fact, the dollar trades within a consolidative mood despite the ADP report showed the US private sector created nearly 750K jobs during September, surpassing initial estimates. In the same line, final Q2 GDP figures noted the economy contracted at an annualized 31.4% during April-June period, slightly above expectations.

In the meantime, markets remain biased towards the risk-off trade and continue to underpin the so far positive performance of the buck.

Later in the session, August’s Pending Home Sales are due along with the Chicago PMI and the EIA’S weekly report on crude oil inventories.

What to look for around USD

The index started the week on a weak note, although it manages well to keep the trade just above the 94.00 yardstick for the time being. It seems the dollar met an important hurdle at the 94.70 region, where coincide a 6-month resistance line. Occasional bullish attempts in DXY are (still) seen as temporary, however, 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 and over further monetary/fiscal stimulus.

US Dollar Index relevant levels

At the moment, the index is advancing 0.18% at 94.04 and a break above 94.74 (monthly high Sep.25) would open the door to 95.36 (100-day SMA) and finally 96.03 (50% Fibo of the 2017-2018 drop). On the other hand, the next support is located at 93.51 (55-day SMA) followed by 92.70 (weekly low Sep.10) and then 91.92 (23.6% Fibo of the 2017-2018 drop).

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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