US Dollar Index trims gains post-data, near 100.40

• DXY ebbs from weekly highs near the 100.70 level.
• US Initial Claims rose by 4.4 million during last week.
• US Markit’s flash manufacturing PMI misses estimates at 36.9.

The greenback keeps the positive stance on Thursday, although it is now trading off daily/weekly highs around 100.70 when tracked by the US Dollar Index (DXY).

US Dollar Index now targets 101.00

The weekly rally in the index is gradually approaching the key barrier at 101.00 the figure, always on the back of the persistent buying bias surrounding the buck. In fact, the dollar manages well to keep its ground in a context where the riskier assets are seeing some respite amidst the recent decline.

In the US data space, Initial Claims rose by 4.4 million during last week, showing that more than 25 million people filed for unemployment insurance benefits in the past 5 weeks.

In addition, Markit’s preliminary services PMI is seen at 27.0 in April (from 39.8), while the manufacturing gauge is expected at 36.9 (from 48.5). Further data saw New Home Sales contracting by 15.4% during March, or 627K units.

What to look for around USD

The recovery in DXY met some resistance near 100.50 for the time being. The recent improved sentiment in the dollar has been propped up by the “fly-to-safety” environment, as investors continue to prefer the dollar to the rest of 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 preference in the safe haven universe.

US Dollar Index relevant levels

At the moment, the index is gaining 0.05% at 100.40 and a break above 100.69 (weekly high Apr.23) would aim for 100.93 (weekly/monthly high Apr.6) and then 101.34 (monthly high Apr.10 2017). On the flip side, the next support emerges at 99.21 (55-day SMA) seconded by 98.82 (monthly low Apr.15) and finally 98.27 (weekly low Mar.27).