- DXY gyrates around the 94.20 region on turnaround Tuesday.
- Investors’ attention stays on data and Trump-Biden first debate.
- Advanced Trade Balance, S&P/Case-Shiller, Fedspeak next on tap.
The US Dollar Index (DXY), which gauges the greenback vs. a bundle of its main competitors, alternates gains with losses ahead of the opening bell in Europe on Tuesday.
US Dollar Index focused on data, politics
The index trades without a clear direction in the low-94.00s on Tuesday following the negative price action and the rejection from the 94.70 region seen at the beginning of the week. It is worth noting that in this area is located the 6-month resistance line, which keeps capping the upside for the time being.
In the meantime, market chatter keeps gyrating around another probable stimulus package amidst the unabated advance of the coronavirus pandemic, while the pace of the economic recovery appears to have lost some traction in past weeks.
Later in the session, the US political scenario will take centre stage as President Trump and Democrat nominee Joe Biden will participate in the first presidential debate in Cleveland, where the pandemic and the economic outlook are expected to be on top of the agenda.
In the US data space, advanced Trade Balance results are due seconded by the S&P/Case-Shiller Index and speeches by New York Fed John Williams (permanent voter, centrist) and Philadelphia Fed Patrick Harker (voter, hawkish).
What to look for around USD
The index started the week on a weak note, although it manages well to keep the trade 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 retreating 0.06% at 94.22 and faces the next support at 93.55 (55-day SMA) followed by 92.70 (weekly low Sep.10) and then 91.92 (23.6% Fibo of the 2017-2018 drop). On the flip side, a break above 94.74 (monthly high Sep.25) would open the door to 95.42 (100-day SMA) and finally 96.03 (50% Fibo of the 2017-2018 drop).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD dips below 0.6600 following RBA’s decision
The Australian Dollar registered losses of around 0.42% against the US Dollar on Tuesday, following the RBA's monetary policy decision to keep rates unchanged. However, it was perceived as a dovish decision. As Wednesday's Asian session began, the AUD/USD trades near 0.6591.
EUR/USD lacks momentum, churns near 1.0750
EUR/USD cycled familiar levels again on Tuesday, testing the waters near 1.0750 as broader markets look for signals to push in either direction. Risk appetite was crimped on Tuesday after Fedspeak from key US Federal Reserve officials threw caution on hopes for approaching rate cuts from the Fed.
Gold wanes as US Dollar soars, unfazed by lower US yields
Gold price slipped during the North American session, dropping around 0.4% amid a strong US Dollar and falling US Treasury bond yields. A scarce economic docket in the United States would keep investors focused on Federal Reserve officials during the week after last Friday’s US employment report.
Solana FireDancer validator launches documentation website, SOL price holds 23% weekly gains
Solana network has been sensational since the fourth quarter (Q4) of 2023, making headlines with a series of successful meme coin launches that outperformed their peers.
Living vicariously through rate cut expectations
U.S. stock indexes made gains on Tuesday as concerns about an overheating U.S. economy ease, particularly with incoming economic reports showing data surprises at their most negative levels since February of last year.