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  • DXY loses the grip further and drops below the 93.00 mark.
  • Risk-on sentiment continues to weigh on the dollar.
  • Industrial/Manufacturing Production, Empire State index next on tap.

The greenback, when measured by the US Dollar Index (DXY), is prolonging the downbeat mood to levels below the 93.00 mark on turnaround Tuesday.

US Dollar Index focused on data, risk trends

The index is losing ground for the third consecutive session in the first half of the week, slipping back below the 93.00 mark and trading at shouting distance from last week’s lows in the 92.70 region.

The dollar continues to suffer the pick-up in the demand for the riskier assets, particularly following the firm message from the ECB at its event last Thursday. In addition, and despite the unremitting advance of the coronavirus pandemic, hopes of a vaccine appears to be lending support to the risk complex and therefore keeping the buck under persistent downside pressure.

In the docket, Industrial and Manufacturing Production for the month of August will take centre stage later in the NA session along with the Empire State index and Export/Import Prices.

What to look for around USD

The rally in the dollar failed near 93.70 in the middle of last week, exposing the index to the resumption of the bearish trend. Occasional bullish attempts, however, are still considered as corrective only amidst the broad bearish stance surrounding the dollar. Supporting this view emerge a more dovish Fed, the unremitting progress of the coronavirus pandemic and political uncertainty ahead of the November elections. On the supportive side of the buck emerge occasional bouts of US-China tensions and the resumption of the risk aversion among investors.

US Dollar Index relevant levels

At the moment, the index is losing 0.17% at 92.90 and faces the next support at 92.70 (weekly low Sep.10) seconded by 91.92 (23.6% Fibo of the 2017-2018 drop) and then 91.75 (2020 low Sep.1). On the other hand, a break above 93.66 (monthly high Sep.9) would open the door to 93.99 (monthly high Aug.3) and finally 94.20 (38.2% Fibo of the 2017-2018 drop).