US Dollar Index looks firmer and approaches 93.00

• DXY fades the initial negative start of the day and approaches 93.00.
• Risk-on sentiment loses traction and supports the move in the dollar.
• Markit’s flash services/manufacturing PMIs next of note in the calendar.

The greenback is trading on a firm note at the end of the week and is now lifting the US Dollar Index (DXY) back to the boundaries of the 93.00 barrier.

US Dollar Index focused on data

The index is recovering the positive note after Thursday’s pullback and stays on track to reclaim the key barrier at 93.00 the figure as the initial preference for riskier appetites has died off.

Indeed, the dollar manages to leave behind recent poor results from the US labour market and the Philly Fed index (published on Thursday) and regained extra pace after data releases in the euro bloc surprised to the downside earlier on Friday.

In the US data sphere, Markit will publish its advanced services and manufacturing gauges for the current month seconded by July’s Existing Home Sales, all later in the NA session.

What to look for around USD

The index trades on a choppy fashion so far this week, managing to come up after recording fresh 2020 lows in the 92.15/10 band earlier in the week. In the meantime,  and looking at the broader picture, investors remain bearish on the dollar against the usual backdrop of a dovish Fed, the unremitting progress of the coronavirus pandemic, political uncertainty and the massive stimulus package, whereas occasional bouts of US-China tensions could lend some temporary legs to the greenback. Supporting the negative stance on the dollar, the speculative community remained clearly biased towards the bearish side during the past week.

US Dollar Index relevant levels

At the moment, the index is up 0.26% at 92.98 and a break above 93.99 (weekly high Aug.3) would aim for 94.20 (38.2% Fibo of the 2017-2018 drop) and then 96.03 (50% Fibo of the 2017-2018 drop). On the downside, the next support lines up at 92.13 (2020 low Aug.18) seconded by 91.92 (23.6% Fibo of the 2017-2018 drop) and then 91.80 (monthly low May 2018).