- DXY eases from Friday’s highs in the 93.60/65 band.
- US politics and another stimulus package remain in centre stage.
- JOLTs Job Openings, Fed’s Evans next on tap in the calendar.
The greenback, when tracked by the US Dollar Index (DXY), has started the week on the negative footing around the 93.30 region at the time of writing.
US Dollar Index looks to politics, data
The index is posting modest losses on Monday, starting its eighth consecutive week in the negative territory. The last time the dollar experienced this price action performance was in the June-August period, where it closed in the red territory for nine consecutive weeks.
In the meantime, the unremitting advance of the pandemic combines with efforts to keep the economic recovery well and sound, rising hopes of a COVID-19 vaccine and the ongoing stalemate in the US political arena around an extra stimulus package to dictate the price action not only in around the dollar but also in the rest of the global assets.
It will be a light session data-wise in the US, with June’s JOLTs Job Openings only due later seconded by the speech by Chicago Fed C.Evans (2021 voter, centrist).
What to look for around USD
The dollar clinched fresh lows near 92.50 in the second half of the last week, albeit managing to reclaim the 93.00 mark and above afterwards. Occasional bullish attempts, however, appears to have run out of favour in the 94.00 region (August 3). Looking at the broader picture, investors keep the bearish stance on the currency unchanged against the usual backdrop of a dovish Fed, the unabated advance of the pandemic and somewhat diminishing momentum in the economic recovery. Also weighing on the buck, market participants seem to have shifted their preference for other safe havens instead of the greenback on occasional bouts of risk aversion. On another front, the speculative community remained well into the negative territory for yet another week, adding to the idea of a more serious bearish trend in the dollar.
US Dollar Index relevant levels
At the moment, the index is losing 0.04% at 93.35 and faces the next support at 92.52 (2020 low Aug.6) seconded by 91.80 (monthly low May 18) and finally 89.23 (monthly low April 2018). On the flip side, a break above 93.99 (weekly high Aug.3) would target 94.20 (38.2% Fibo of the 2017-2018 drop) en route to 96.03 (50% Fibo of the 2017-2018 drop).
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