- The index remains bid in the 98.30/40 band.
- The upside stays so far limited by the 98.50 area.
- US markets are closed today and will be open half-day on Friday.
The US Dollar Index (DXY), which gauges the buck vs. a bundle of its main competitors, is managing well to keep the business in the positive territory in the 98.35/40 band so far this week.
US Dollar Index looks to 98.50
The index is up for the second consecutive week so far on Thursday, regaining poise on the back of persistent weakness in its rivals - particularly the euro - and also deriving extra strength from recent positive results in key US fundamentals.
In the meantime, the US-China trade front continues to be the exclusive driver of the sentiment in the global markets despite the noticeable lack of fresh news and the tiresome rhetoric regarding how close a deal (or a ‘Phase One’ deal) is.
Absent releases in the US calendar for the rest of the week, 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 preliminary U-Mich index.
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 advancing 0.05% at 98.36 and a breakout of 98.45 (monthly high Nov.13) would open the door to 99.25 (high Oct.8) and then 99.67 (2019 high Oct.1). On the other hand, the next support lines up at 98.09 (100-day SMA) seconded by 97.68 (low Nov.18) and finally 97.60 (200-day SMA).
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