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  • DXY adds to Wednesday’s gains above the 97.00 mark.
  • Rising coronavirus cases, trade tensions support the dollar.
  • Another revision on Q1 GDP, Durable Goods, Claims next on tap.

The greenback, tracked by the US Dollar Index (DXY), is extending the advance beyond the 97.00 barrier and adding to Wednesday’s gains.

US Dollar Index propped up by risk-off tone

The index is advancing for the second consecutive session in the second half of the week, prolonging the rebound from weekly lows near 96.40 recorded on Tuesday.

The mood around the dollar improved as of late in tandem with the increasing demand for the safe haven space, all in response to unabated rise in coronavirus cases, uncertainty around the re-opening of the economy and fresh US-UK-EU trade tensions.

Moving forward and in the US calendar, another revision of the Q1 GDP is due seconded by Durable Goods Orders and the weekly report of Initial Claims. In addition, Dallas Fed R.Kaplan (voter, hawkish) is due to speak along with speeches by Atlanta Fed R.Bostic (2021 voter, centrist) and Cleveland Fed L.Mester (voter, hawkish).

What to look for around USD

The re-emergence of the risk aversion in response to COVID-19 developments and trade jitters have lent extra support to the dollar in the last couple of sessions. In the meantime, price action around the buck is expected to track the performance of the broad risk appetite trends, US-China trade developments and the progress of the re-opening of the economy. On the constructive stance around the buck, bouts of risk aversion should support the investors’ preference for the greenback as a safe haven along with its status of global reserve currency and store of value.

US Dollar Index relevant levels

At the moment, the index is gaining 0.09% at 97.30 and a break above 97.74 (weekly high Jun.22) would aim for 97.87 (61.8% Fibo of the 2017-2018 drop) and finally 98.37 (200-day SMA). On the other hand, initial contention is located at 96.39 (weekly low Jun.23) seconded by 96.03 950% Fibo of the 2017-2018 drop) and finally 95.72 (monthly low Jun.10).