US Dollar Index tumbles to fresh lows in sub-98.00 levels

DXY drops further and breaches the 98.00 mark.
Risk-on sentiment continues to hurt the dollar on Monday.
ISM Manufacturing PMI, Markit’s PMI next on the US docket.

Pablo Piovano FXStreet

The greenback, in terms of the US Dollar Index (DXY), is shedding further ground at the beginning of the week and is now putting the 98.00 mark to the test.

US Dollar Index looks to data

The index is losing ground for the fifth consecutive session on Monday, challenging the key support at 98.00 the figure and opening the door to a potential test of the Fibo retracement (of the 2017-2018 drop) at 97.87.

In the meantime, investors continue to assess the rising protests in several US cities amidst the coronavirus pandemic and increasing risks of further contagion.

In the US data space, the most salient event on Monday will be the ISM Manufacturing seconded by the final manufacturing PMI gauged by Markit for the month of May.

What to look for around USD

The greenback remains under heavy pressure at the beginning of the month, threatening to extend the downtrend well below the 98.00 mark against the backdrop of firm risk-on sentiment. In the meantime, the dollar remains vigilant on the US-China trade front, the gradual return to some sort of normality in the US economy and the broader risk appetite trends as main drivers of the price action. On the constructive stance around the buck, it remains the safe haven of choice among investors, helped by its status of global reserve currency and store of value.

US Dollar Index relevant levels

At the moment, the index is retreating 0.36% at 97.94 and faces the next support at 97.89 (monthly low Jun.1) followed by 97.87 (61.8% Fibo of the 2017-2018 drop) and then 97.35 (low Jan.31). On the upside, a break above 98.50 (200-day SMA) would aim for 99.04 (100-day SMA) and finally 99.98 (high May 25).

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.

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

Gold tumbles as blockbuster US NFP lift US Dollar, Treasury yields

Gold (XAU/USD) falls sharply on Friday, snapping a two-day recovery after the US Nonfarm Payrolls (NFP) report surprised strongly to the upside. The metal briefly climbed above $4,500 on Thursday, gaining nearly 2%, but has since erased a large part of that advance.

Crypto’s $638 million buyback boom may not be as bullish as it looks

Decentralized Finance (DeFi) protocols reportedly spent $638 million to buy back their native tokens in August, up 17% from a year earlier. On the surface, the buyback trend suggests the cryptocurrency industry is maturing fast, adopting one of Wall Street’s oldest tools to bolster valuations and distribute revenue. The headline becomes less impressive once the number is opened up.

Why hawkish Bank of Japan expectations aren't enough to sustain the Japanese Yen rally

The Japanese Yen (JPY) experienced a sudden burst higher after falling back below the 160.00 psychological mark against the US Dollar (USD) earlier this week amid a more hawkish repricing of Bank of Japan (BoJ) rate hike expectations.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.