- DXY clinches the key 100.00 barrier and beyond.
- Markets’ attention remains on oil and the coronavirus.
- Existing Home Sales next on tap in the US docket.
The US Dollar Index (DXY), which tracks the greenback vs. a bundle of its main competitors, is prolonging the upbeat momentum on Tuesday and advances above the 100.00 mark.
US Dollar Index bolstered by risk-off sentiment
The index is navigating the area of weekly highs above 100.00 the figure and is flirting at the same time with 2-week highs, always underpinned by a moderate sentiment towards the risk-off trade.
In fact, the collapse in prices of the West Texas Intermediate to negative levels for the first time ever dragged the rest of the risk-associated complex and lent oxygen to the buck, supporting at the same the demand for US bonds.
Later in the US docket, the only release of note will be the Existing Home Sales for the month of March.
What to look for around USD
DXY is extending the optimism in the first half of the week and manages to retake the area above the 100.00 barrier. The recent improved sentiment in the dollar has been propped up by the “fly-to-safety” environment, as investors continue to prefer the buck when comes to the safe haven universe. In the meantime, all the attention remains on the COVID-19 amidst countries extending their lockdown periods, speculation of a global recession and further deterioration of fundamentals. On the supportive side of the buck, its status of “global reserve currency” and store of value underpins its safe haven preference.
US Dollar Index relevant levels
At the moment, the index is gaining 0.23% at 100.17 and a break above 100.30 (weekly high Apr.16) would aim for 100.49 (78.6% Fibo retracement of the 2017-2018 drop) and then 100.93 (weekly/monthly high Apr.6). On the flip side, the next support emerges at 99.14 (55-day SMA) seconded by 98.82 (monthly low Apr.15) and finally 98.27 (weekly low Mar.27).
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