- DXY loses further momentum and trades near 98.10.
- Upside pressure in EUR, GBP weighs on the dollar.
- ISM Manufacturing due later in the session.
The US Dollar Index (DXY), which gauges the greenback vs. a basket of its main rivals, is now losing further ground and tests the vicinity of the key support at 98.00 the figure.
US Dollar Index offered ahead of key data
The index is accelerating the downside on Monday and loses ground for the second session in a row against the backdrop of the continuation of the buying pressure in the euro and the sterling and despite the correction higher in US yields.
In fact, the buck came under extra selling pressure on Monday after failing to extend the earlier uptick to the 98.35/40 band. Indeed, the index is now challenging a key contention area in the vicinity of the 98.00 handle, where coincide the 10-day, 100-day and 21-day SMAs.
In the data universe, Markit's final November PMI came in above estiamtes at 52.6 ahead of the upcoming ISM Manufacturing. Later in the week, the ADP report and the ISM Non-manufacturing are expected on Wednesday, usual weekly Claims and Factory Orders on Thursday and Non-farm Payrolls for the month of November will be published on Friday.
What to look for around USD
DXY manages well to keep business in the upper end of the recent range so far amidst a steady bid note. Further out, investors are expected to keep monitoring developments from the US-China trade front as well as US fundamentals, all against the backdrop of the ‘wait-and-see’ stance from the Fed. 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 ‘good shape’ of the US economy, the dollar’s safe haven appeal and its status of ‘global reserve currency’.
US Dollar Index relevant levels
At the moment, the pair is losing 0.14% at 98.14 and faces the next support at 98.11 (100-day SMA) seconded by 97.68 (low Nov.18) and finally 97.62 (200-day SMA). On the upside, a breakout of 98.54 (monthly high Nov.29) would open the door to 99.25 (high Oct.8) and then 99.67 (2019 high Oct.1).
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