US Dollar Index holds on around 93.00

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  • DXY clings to daily gains around the 93.00 mark.
  • US politics, stimulus bill remain in the limelight so far.
  • IMF/World Bank Annual Meeting coming up later on Monday.

The greenback manages to regain some traction at the beginning of the week and lifts the US Dollar Index (DXY) to the area of daily highs in the 93.10/15 band.

US Dollar Index looks to politics, risk trends

The index picks up pace at the beginning of the week and manages to keep the trade above the 93.00 mark so far.

In fact, following Friday’s sharp pullback, the greenback trades on a better mood amidst persistent uncertainty in the US political scenario with less than a month to the elections and despite US policymakers agreed to resume discussions on another stimulus bill later in the week.

Nothing scheduled data wise in the US calendar, while all the attention is expected to be on the IMF/World Bank Virtual Annual Meeting. In the next sessions, investors will remain focused on the CPI figures (Tuesday), the Fed’s Beige Book (Wednesday), Initial Claims and the Philly Fed index (Thursday), Retail Sales and the advanced U-Mich index (Friday).

What to look for around USD

The index receded and re-visited the 93.00 region in past hours. The ongoing bullish attempts, however, is seen as temporary, as the underlying sentiment towards the greenback remains cautious-to-bearish. This view is reinforced by the “lower for longer” stance from the Federal Reserve, hopes of a strong recovery in the global economy, the negative position in the speculative community and political uncertainty ahead of the November elections. The resumption of market chatter surrounding another stimulus package is also weighing on the dollar.

US Dollar Index relevant levels

At the moment, the index is gaining 0.03% at 93.08 and a break above 94.20 (38.2% Fibo retracement of the 2017-2018 drop) would aim for 94.74 (monthly high Sep.25) and finally 94.86 (100-day SMA). On the downside, immediate contention lines up at 92.70 (weekly low Sep.10) followed by 91.92 (23.6% Fibo of the 2017-2018 drop) and then 91.80 (monthly low May 2018).

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