- DXY trades within a tight range in the vicinity of 97.00.
- Markets’ focus remains on the re-opening of the economy.
- This week’s docket includes the FOMC, CPI, PPI, Claims and the U-Mich.
The greenback, in terms of the US Dollar Index (DXY), is alternating gains with losses at the beginning of the week around the 97.00 area.
US Dollar Index focused on risk trends, data
The index is looking to consolidate in the lower end of the recent range following the sharp decline observed in the last sessions of May and early June, including a drop to fresh 3-month lows in the 96.45/40 band (Friday).
In the meantime, the dollar remains under pressure against the backdrop of from risk appetite trends, in turn sustained by the re-opening of the economy and recent better-than-expected results from key fundamentals.
In the US data space, the most relevant event will be the FOMC meeting on Wednesday and the subsequent press conference by Chief Powell. Later in the week, inflation figures tracked by the CPI will also be in the limelight seconded by weekly Claims, producer Prices and the flash print for the Consumer Sentiment.
What to look for around USD
The greenback struggles for direction at the beginning of the week, although it has managed to reclaim some ground lost after bottoming out in the mid-96.00s during last week. As usual in last sessions, price action around the dollar is expected to keep tracking the performance of the broad risk appetite trends, US-China trade developments and the progress on the re-opening of the economy. On the constructive stance around the buck, bouts of risk aversion should support the investors’ preference for the greenback as a safe haven along with its status of global reserve currency and store of value.
US Dollar Index relevant levels
At the moment, the index is losing 0.02% at 96.94 and faces the next support at 96.44 (monthly low Jun.5) followed by 96.33 (monthly low Dec.31 2019) and then 96.03 (50% Fibo of the 2017-2018) drop. On the flip side, a breakout of 97.87 (61.8% Fibo of the 2017-2018 drop) would aim for 98.46 (200-day SMA) and finally 99.02 (100-day SMA).
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