US Dollar Index retreats from highs near 96.60

The greenback, in terms of t he US Dollar Index (DXY), has accelerated the upside momentum today and advanced to fresh weekly peaks around 96.60, although the move lacked of follow through.

US Dollar Index clings to daily gains around 96.20

The index printed fresh weekly highs near 96.60 following the dovish tone from the ECB at its meeting today and the subsequent press conference by President Draghi.

President Draghi said the economic outlook in the euro bloc now faces downside risks, while he stressed that the region still needs a significant degree of accommodation. Draghi also said the central bank will monitor the extent of the ongoing slowdown, adding that the Council believes there is a slow probability of a recession.

In the US data space, Initial Claims rose at a weekly 199K (the lowest print since October1969), taking the 4-Week Average to 215.00K from 220.50K. Further data saw the advanced manufacturing PMI tracked by Markit at 54.9 for the current month.

What to look for around USD

The potential impact of the onging US shutdown on the economy appears to be gathering some traction among investors and carries the potential to dent the sentiment if it remains unsolved. In addition, the US-China trade dispute is slowly returning to the fore ahead of next week’s meeting between US and Chinese officials. In this regard, Secretary W.Ross already ruled out a deal at the meeting.

US Dollar Index relevant levels

At the moment, the pair is gaining 0.03% at 96.14 and a break above 96.58 (high Jan.24) would open the door to 96.59 (55-day SMA) and finally 96.96 (2019 high Jan.2). On the downside, immediate contention aligns at 96.04 (low Jan.24) seconded by 95.76 (50% Fibo of the September-December up move) and then 95.30 (200-day SMA).