- DXY stays parked in the 98.30 region on Friday.
- US equities, bonds will trade on a shortened session.
- US-China trade remains in centre stage.
The greenback keeps navigating the area of weekly highs in the 98.30/40 band at the end of the week when gauged by the US Dollar Index (DXY).
US Dollar Index looks to trade, upcoming data
The index trades close to the area of monthly peaks – or multi-week highs – just below the key hurdle at 98.50, although a breakout of this barrier still remains elusive for USD-bulls.
In the meantime, volatility and trade conditions in the global markets are expected to remain thin following the Thanksgiving Day holiday in the US on Thursday and Friday’s shortened trade session in Wall St.
There is no news regarding the US-China trade deal (or lack of it), and all the attention has now moved to the unremitting social unrest in Hong Kong and the recently approved Humans Right bill by the US Senate and the subsequent protest from China.
Absent releases in the US docket, the next significant event will be on Monday, when the ISM publishes its manufacturing gauge for the month of November. Additional key data out next week will be the ADP report, the ISM Non-Manufacturing, Factory Orders, November’s Non-farm Payrolls and the advanced Consumer Sentiment.
What to look for around USD
The index keeps the topside well and sound so far this week amidst usual rhetoric on the trade front. In the meantime, investors keep monitoring US fundamentals amidst the ‘wait-and-see’ stance from the Fed. On the US political scenario, the effervescence around President Trump’s impeachment process seems to be dissipating with the day. On the broader view, however, the outlook on the greenback still looks constructive on the back of a cautious Fed vs. the broad-based dovish stance from its G10 peers, the dollar’s safe haven appeal and the status of ‘global reserve currency’.
US Dollar Index relevant levels
At the moment, the pair is losing 0.01% at 98.31 and faces the next support at 98.10 (100-day SMA) seconded by 97.68 (low Nov.18) and finally 97.61 (200-day SMA). On the upside, a break above 98.45 (monthly high Nov.13) would open the door to 99.25 (high Oct.8) and then 99.67 (2019 high Oct.1).
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