- DXY climbs to multi-day highs near 93.30 on Wednesday.
- The advance of the pandemic, US elections support the dollar,
- MBA’s weekly Mortgage Applications, flash Trade Balance next on tap.
The US Dollar Index (DXY), which gauges the greenback vs. a bundle of its main competitors, resumes the upside beyond the 93.00 mark on Wednesday.
US Dollar Index in multi-day highs
The index picks up extra pace following the opening bell in Europe and advances further north of the 93.00 barrier so far on Wednesday.
In fact, the unremitting advance of the coronavirus pandemic coupled with the re-implementation of restrictions in several countries appears to lend support to the demand for the safe havens on Wednesday.
In addition, fading hopes of further stimulus in the US economy in combination with uncertainty around the US presidential elections also collaborates with the renewed inflows into the buck.
In the US data space, weekly Mortgage Applications tracked by the MBA are due in the first turn seconded by the advanced Trade Balance figures for the month of September and the weekly report on US crude oil supplies by the EIA.
What to look for around USD
The index manages to regain the area above the key 93.00 barrier so far this week. The current recovery in the dollar comes in response to the impact of the COVID-19 pandemic on the global growth prospects as well as fading chances of a deal between Democrats and Republicans over a new stimulus bill. However, the stance on the dollar is likely to deteriorate in case of a “blue wave” following the presidential elections next month, while the “lower for longer” stance from the Federal Reserve also caps occasional bullish attempts.
US Dollar Index relevant levels
At the moment, the index is gaining 0.21% at 93.28 and a break above 93.90 (weekly high Oct.15) would expose 94.20 (38.2% Fibo retracement of the 2017-2018 drop) and finally 94.74 (monthly high Sep.25). On the other hand the next support is located at 92.47 (monthly low Oct.21) followed by 91.92 (23.6% Fibo of the 2017-2018 drop) and then 91.80 (monthly low May 2018).
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