US Dollar Index comes under pressure near 99.60, focus on data

• DXY eases further ground and recedes to the 99.60 region.
• US-China trade conflict, coronavirus pandemic remain in centre stage.
• CB’s Consumer Confidence, housing data next of relevance in the docket.

The greenback, when tracked by the US Dollar Index (DXY), has come under renewed downside pressure and visits the 99.60 zone on Tuesday.

US Dollar Index focused on data, trade

After four consecutive daily advances, including a test of the boundaries of the 100.00 mark on Monday, the index has now come under selling pressure and retreats to the 99.70/60 band on turnaround Tuesday.

In the meantime, concerns on the US-China trade front appear to have lost some traction in past hours, leaving the dollar exposed to sellers and sustaining the better tone in the risk-associated complex.

Furthermore, the greenback continues to track the developments from the coronavirus, the impact on the economy and the return to the economic activity albeit at a glacial pace.

Later in the docket, the Consumer Confidence measured by the Conference Board will be in the limelight seconded by the House Price Index, the S&P/Case-Shiller index, New Home Sales, the Chicago Fed index and the Dallas Fed manufacturing gauge.

What to look for around USD

The recovery in the greenback lost momentum just below 100.00 the figure so far this week on the back of a better mood in the riskier assets. In the meantime, the dollar remains vigilant on the US-China trade front and the gradual return to some sort of normality in the US economy. On the constructive stance around the buck, it remains the safe haven of choice among investors, helped by its status of global reserve currency and store of value. The dollar also derived extra support after Fed’s J.Powell recently ruled out negative rates, although he stressed the readiness of the Fed to implement further measures to support the economy.

US Dollar Index relevant levels

At the moment, the index is losing 0.18% at 99.63 and faces the next support at 99.00 (weekly low May 20) followed by 98.57 (monthly low May 4) and then 98.49 (200-day SMA). On the other hand, a break above 99.98 (weekly high May 25) would aim for 100.56 (monthly high May 14) and finally 100.93 (weekly/monthly high Apr.6).