US Dollar Index sidelined around 97.40 post-US data

The index clings to gains near 97.40 today.
US 10-year yields meandering below the 2.50% area.
US Durable Goods Orders surprised to the downside.

Pablo Piovano FXStreet

The greenback is extending the consolidative trade so far on Tuesday, managing well to keep the daily gains in the 97.40 region when tracked by the US Dollar Index (DXY).

US Dollar Index apathetic on data

The index has practically ignored today’s data in the US docket, where February’s Durable Goods Orders contracted at a monthly 1.6% and expanded 0.1% when comes to Core orders.

In the meantime, the greenback keeps the positive note amidst the sideline performance in US yields, uncertainty around Brexit and no news in the US-China hood, all within the erratic mood in the risk appetite trends.

Looking ahead, the ADP report is next of relevance in the docket tomorrow along with the ISM Non-manufacturing and ahead of Friday’s always-critical Non-farm Payrolls for the month of March.

What to look for around USD

The greenback remains bid against the backdrop of uncertainty around Brexit, lack of significant progress in the US-China trade talks and a generalized deteriorating mood surrounding the riskier assets. In addition, positive results in the US calendar have been also fuelling the upside in DXY to 97.00 and beyond, while market participants continue to adjust to the prospects of no hikes from the Fed this year and just one probable rate raise in 2020. Additionally, the buck’s safe haven appeal and widening rate differentials vs. its peers are also are also lending support to the move. From the political view, the debt ceiling, the border-wall funding and upcoming elections next year carry the potential to spark bouts of extra volatility around USD.

US Dollar Index relevant levels

At the moment, the pair is up 0.05% at 97.38 and a breakout of 97.46 (high Apr.2) would expose 97.71 (2019 high Mar.7) and finally 97.87 (monthly high Jun.20 2017). On the flip side, the initial support emerges at 96.83 (21-day SMA) seconded by 96.52 (55-day SMA) and finally 95.74 (low Mar.20).

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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