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  • DXY bounces off recent lows and regains the 92.40 region.
  • The dollar remains under pressure near 2020 lows.
  • Fedspeak, Dallas Fed index only of note in the US calendar.

The greenback, in terms of the US Dollar Index (DXY), manages to regain some poise and is testing the area of daily highs in the 92.40 zone at the beginning of the week.

US Dollar Index focused on risk trends, data

The index is now showing some signs of life following Friday’s sharp pullback to weekly lows around 92.20. Sellers, however, remain unable to push the dollar further south of the 92.00 neighbourhood, levels last seen in May 2018.

In the meantime, investors continue to look o to the broad risk appetite trends when comes to determine the price action around the buck, while the US political backdrop continues to gain presence as we get closer to the November elections.

Later in the US data space, FOMC’s R.Clarida (permanent voter, dovish) is due to speak along with Atlanta Fed R.Bostic (2021 voter, centrist). In addition, the Dallas Fed will publish its manufacturing gauge for the month of August.

What to look for around USD

The index has started the week on a cautious/positive note, leaving behind some of the weakness seen following Chief Powell’s virtual speech at the Jackson Hole Symposium. In the meantime, and looking at the broader picture, investors remain bearish on the dollar against the backdrop of a (more) dovish Fed, the unremitting progress of the coronavirus pandemic, political uncertainty and the massive stimulus package, whereas occasional bouts of US-China tensions could lend some temporary legs to the greenback.

US Dollar Index relevant levels

At the moment, the index is gaining 0.11% at 92.40 and a break above 93.47 (weekly high Aug.21) would aim for 93.99 (monthly high Aug.3) and finally 94.20 (38.2% Fibo of the 2017-2018 drop). On the downside, the next support is located at 92.20 (weekly low Aug.28) seconded by 92.13 (2020 low Aug.18) and then 91.92 (23.6% Fibo of the 2017-2018 drop).

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