- The demand for the greenback remains subdued on Wednesday.
- Yields of the US 10-year reference keep daily tops near 2.96%.
- US trade deficit narrowed to $46.2 billion in April.
The US Dollar Index (DXY), which measures the greenback vs. a basket of its main competitors, remains on the back footing so far this week and threatens to visit the mid-93.00s and below.
US Dollar in 2-week lows
The index is prolonging the weekly leg lower and is at the same time testing the critical contention area around 93.60/50, where sits the 23.6% Fibo of the April-May rally.
USD remained apathetic after US trade deficit in April shrunk to $46.2 billion, bettering forecasts. Further US publications today saw Q1’s Unit Labor Costs rising 2.9% QoQ and Non-farm Productivity expanding 0.4% inter-quarter.
Hawkish ECB-speak boosted the demand for the single currency earlier today. This, in combination with short-covering have propelled EUR/USD to fresh tops in levels close to the key barrier at 1.1800 the figure, all in detriment of the buck.
Looking ahead, the G7 meeting in Quebec (Canada) should grab all the markets’ attention, with trade expected to remain in centre stage.
US Dollar relevant levels
As of writing the index is losing 0.49% at 93.43 and a breakdown of 93.42 (high May 8) would aim for 92.80 (38.2% Fibo of the April-June up move) and then 92.24 (low May 13). On the upside, the next hurdle emerges at 94.08 (10-day sma) followed by 94.45 (high May 31) and finally 95.01 (2018 high May 29).
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