US Dollar Index eases from tops well above 101.00

• DXY moves to fresh 3-year highs beyond 101.70.
• Developments around the COVID-19 keep ruling the global mood.
• Philly Fed index, Initial Claims next on the US calendar.

The greenback, in terms of the US Dollar Index (DXY), keeps the bid tone unchanged so far this week, although it has receded from Wednesday’s 3-year highs in the 101.70/75 band.

US Dollar Index in multi-year highs

The index accelerated the upside on Wednesday, as market participants continued to evaluate the recent stimulus measures announced by the Federal Reserve. In fact, DXY quickly surpassed the 100.00 and 101.00 marks on Wednesday to clinch fresh tops last seen in March 2017.

The dollar, in the meantime, remains propped up by the ongoing funding stress, which has been behind the sharp increase in the demand for the currency particularly since the beginning of the week.

In the US data space, the Philly Fed manufacturing gauge will be in centre stage along with the usual weekly Claims.

What to look for around USD

DXY rapidly left behind key up barriers amidst the ongoing rally, always sustained by the firm demand of the dollar on the back of funding concerns. In the meantime, markets’ focus remains on the developments from the COVID-19 and its impact on the global economy amidst (now) looser monetary policy conditions from the Fed and the rest of the major central banks.

US Dollar Index relevant levels

At the moment, the index is advancing 0.14% at 101.05 and a breakout of 101.74 (2020 high Mar.18) would open the door to 102.26 (monthly high March 2017) and finally 103.65 (monthly high December 2016). On the flip side, immediate contention is located at 100.49 (78.6% Fibo of the 2017-2018 drop) followed by 99.91 (monthly high Feb.20) and then 98.05 (55-day SMA).