US Dollar Index struggles to break above 93.00 post-data

The upbeat momentum in the greenback remains well and sound on Thursday, motivating the US Dollar Index (DXY) to challenge multi-day peaks around 93.00.

US Dollar Index now targets 93.50

The index trades close to the 93.00 neighbourhood in the second half of the week, prolonging the upside momentum for the third session in a row and putting further distance from +2-year lows near 91.70 seen earlier in the week (Sep.1).

The softer note in the risk complex has been exacerbated by the profit taking sentiment, while positive results from US fundamentals as of late also lent extra legs to the buck.

In the docket, Initial Claims rose by 881K during last week, bettering expectations. Further data saw the trade deficit widening to $63.6 billion in July, Unit Labor Costs expanding 9.0% QoQ in Q2 and Nonfarm Productivity expanding 10.1% inter-quarter during the same period.

What to look for around USD

The index extends the rebound from fresh +2-year lows near 91.70 and is already gyrating around the 93.00 level. Despite the ongoing recovery, and looking at the broader picture, investors keep the bearish view on the dollar unchanged against the backdrop of a (more) dovish Fed, the unremitting progress of the coronavirus pandemic and political uncertainty ahead of the November elections. On the supportive side of the buck emerge occasional bouts of US-China tensions.

US Dollar Index relevant levels

At the moment, the index is gaining 0.22% at 92.85 and a break above 93.07 (weekly high Sep.3) would aim for 93.47 (weekly high Aug.21) and finally 93.99 (monthly high Aug.3). On the other hand, the next support is located at 91.75 (2020 low Sep.1) seconded by 89.23 (monthly low April 2018) and then 88.94 (monthly low March 2018).