Week ahead in the markets: What to expect of Dollar Index?

Dollar Index (DXY) retreated from 101.34 (Apr 10 high) to 100.00 (Apr 13 low) and is seen trading around 100.40 levels in the Asian session today. The greenback is being offered across the safe haven assets, but remains bid against the EUR.

Geopolitical tensions are on the rise

Despite North Korea’s failed missile launch, the tense standoff between the US and North Korea continues. As per Reuters report, “The US, its allies and China are working together on a range of responses to North Korea's latest failed ballistic missile test, US President Donald Trump's national security adviser said on Sunday.”

The heightened geopolitical tensions could keep the traditional safe havens well bid throughout the week.

Week ahead

Monday - China Retail sales, GDP

A weaker-than-expected China Q1 GDP could aggravate the selling in the risk assets.

Tuesday - US Housing data

Economists estimate that US housing starts declined 2.2% last month to an annualised pace of 1.26m units. Meanwhile, the industrial production rose 0.5% in March from the previous month when they were flat.

Thursday - Japanese trade balance

Japanese Yen strengthened in March; hence it will be interesting to see if the Japanese exports continued the winning streak. However, the data may not have any impact on the USD/JPY pair.

Friday - UK retail sales

A survey from Visa and British Retail Consortium data released earlier this month showed the Brits are feeling the pinch of the higher inflation. The official retail sales data, if better-than-expected, could strengthen the GBP/USD pair.

Sunday - French Presidential Election

The first round of the Binary event is a choice between Emmanuel Macron, the 39-year-old former Rothschild banker, and far-right leader Marine Le Pen, who leads the National Front. A Marine Le Pen victory in the first-round would heighten the odds of her being victorious in the second round and lead to a sell-off in the EUR/USD pair (Dollar Index).

Dollar Index Technical Levels

A break above 100.80 (50-DMA) would open doors for 101.34 (Apr 4 high). A daily close above the same would revive the bullish view and open up upside towards 102.26 (Mar 2 high). On the downside, breach of the support at 100.00 (zero figure) could yield a sell-off to 99.55 (Mar 22 low) and 98.86 (Mar 27 low).