- DXY reverses the recent downside and retakes 92.40.
- Markets’ attention remains on the pandemic, Fed, politics.
- The absence of US data releases leaves the focus on risk trends.
The greenback, when tracked by the US Dollar Index (DXY), regains some upside traction and clinches daily highs around 92.40.
US Dollar Index looks to pandemic, risk trends
The index manages to attract some buyers at the end of the week and following six consecutive sessions with losses. The dollar’s weekly leg lower appears to have met some decent contention in the 92.20 region, however, area coincident with the 6-month support line (off 2020 peaks on March 20).
In the meantime, traders continue to track the progress of the coronavirus pandemic in the US and the rest of the world, with optimism of an effective vaccine losing some of its recent shine at the same time.
Nothing scheduled in the US calendar today, leaving the price action to the mercy of the broad risk appetite trends.
What to look for around USD
The recent downside in DXY halted just ahead of the 92.00 neighbourhood, where some decent contention seems to have turned up. In the meantime, the dollar remains focused on the post-elections scenario and a the prospects of the US economy under the Biden administration while monitoring at the same time the impact of the second wave of the pandemic on the economic recovery. On another front, the “lower for longer” stance from the Federal Reserve is expected to keep limiting a potential serious upside in the dollar.
US Dollar Index relevant levels
At the moment, the index is gaining 0.10% at 92.38 and a breakout of 93.20 (weekly high Nov.11) would open the door to 93.62 (100-day SMA) and finally 94.30 (monthly high Nov.4). On the flip side, immediate contention emerges at 92.13 (monthly low Nov.9) followed by 91.92 (23.6% Fibo of the 2017-2018 drop) and then 91.80 (monthly low May 2018).
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