- DXY adds gains to Thursday’s advance above the 97.00 mark.
- Coronavirus pandemic keeps advancing in the US and challenges recovery.
- US markets are closed due to the Independence Day holiday.
The greenback, when measured by the US Dollar Index (DXY), is trading on a positive mood around the 97.30 area at the end of the week.
US Dollar Index focused on risk trends
The index is up for the second session in a row on Friday, gathering extra pace as of late following persistent concerns over the unremitting advance of the coronavirus pandemic.
Indeed, the demand for the dollar picked up pace pari passu with the re-emergence of the risk aversion among traders despite better-than-forecasted results from the US labour market during June lent some support to the risk-associated universe.
There are no scheduled data releases in the US on Friday as markets will remain closed in observance of the Independence Day holiday.
What to look for around USD
The unremitting advance of the pandemic in the US remains in centre stage amidst efforts to keep the re-opening of the economy well in place and news surrounding potential vaccines. As always, the broad risk appetite trends emerge as the main driver for the dollar in the short-term coupled with omnipresent US-China trade effervescence. 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. Playing against this, the ongoing (and potentially extra) stimulus packages by the Federal Reserve could limit the dollar’s upside.
US Dollar Index relevant levels
At the moment, the index is gaining 0.03% at 97.24 and a break above 97.80 (weekly high Jun.30) would aim for 97.87 (61.8% Fibo of the 2017-2018 drop) and finally 98.32 (200-day SMA). On the flip side, the next contention emerges at 96.39 (weekly low Jun.23) seconded by 96.03 (50% Fibo of the 2017-2018 drop) and finally 95.72 (monthly low Jun.10).
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