- DXY advances to the 99.70 region on Thursday.
- US equities, yields started the quarter on the back foot.
- Claims, Trade Balance, Factory Orders, Durable Goods next on tap.
The greenback, when tracked by the US Dollar Index (DXY), is adding to Wednesday’s gains and advances to the 99.70 region ahead of the opening bell in Euroland.
US Dollar Index now looks to the docket
The index is advancing for the second session in a row in the second half of the week, navigating the upper end of the recent range and so far prolonging the optimism seen at the beginning of the month.
In the meantime, the centre of the debate remains on the negative effects of the coronavirus on the US economy, where the labour market (via weekly Claims and the latest ADP report) and the manufacturing sector (the ISM Manufacturing slipped back into the contraction territory in March) have already showed signs of deterioration.
Later in the US docket, all the attention will be on Initial Claims, particularly after the latest surge to a record high of nearly 3.3M applications during last week. Additionally, Trade Balance figures are due along with Factory Orders and Durable Goods Orders.
What to look for around USD
DXY has regained the upper hand so far this week after bottoming out in the 98.30 region in past sessions. In addition, the greenback has so far managed to keep business above the key 200-day SMA and therefore maintaining the constructive outlook while re-targeting the triple-digit barrier. However, speculation of extra stimulus carries the potential to undermine the recovery in the buck and thus leaves the upside somewhat limited, all against the backdrop of unremitting concerns around the impact of the coronavirus on the US economy.
US Dollar Index relevant levels
At the moment, the index is gaining 0.10% at 99.58 and a breakout of 99.95 (weekly high Mar.31) would aim for 100.49 (78.6% Fibo retracement of the 2017-2018 drop) and then 102.99 (2020 high Mar.20). On the other hand, the next support emerges at 98.27 (weekly low Mar.27) seconded by 98.04 (200-day SMA) and then 97.87 (61.8% Fibo retracement of the 2017-2018 drop).
Share
