- DXY regains the smile and advances to 98.80 on Monday.
- President Trump signed the $2 trillion coronavirus bill on Friday.
- Pending Home Sales, Dallas Fed index next on the docket.
The greenback, when tracked by the US Dollar Index (DXY), seems to have met some decent contention in the 98.30/25 band at the beginning of the week.
US Dollar Index supported by the 100-day SMA
The index regains the smile on Monday following four consecutive daily pullbacks and after meeting interim support in the 98.30 region, close to the critical 200-day SMA – today at 98.00.
In the meantime, the greenback is recovering part of the ground lost in past sessions and manages to retake the 98.80 area as market participants continue to digest the recently announced stimulus measures by the White House and the Federal Reserve.
In fact, President Trump signed late on Friday the $2 trillion coronavirus bill following the vote at the House of Representatives.
The dollar is now starting the week on a better mood after shedding nearly 5% during last week, while US equities managed to reverse two weekly closes in the red territory and posted the best week since 1928, gaining nearly 13%. The positive start of the week in DXY also follows further easing by the PboC after it reduced the 7-day reverse repo rate to 2.2% (from 2.4%) and injected around CNY 50 billion into the system.
Later in the NA session, February’s Pending Home Sales and the Dallas Fed index will be the only releases in the docket.
What to look for around USD
Finally, some respite for the greenback after finding contention near 98.30. Further stimulus measures announced by the Fed and the US government as of late lent extra legs to the riskier assets and put the buck under further downside pressure. The sentiment around the dollar deteriorated further after weekly Claims surged to an all-time record high during last week, when nearly 3.3 million US citizens filed for unemployment benefits, while Chief Powell’s downbeat comments at his interview last Thursday also collaborated with the selling bias.
US Dollar Index relevant levels
At the moment, the index is gaining 0.46% at 98.76 and a breakout of 100.49 (78.6% Fibo retracement of the 2017-2018 drop) would expose 102.99 (2020 high Mar.20) and finally 103.65 (monthly high December 2016). On the other hand, the next support emerges at 98.27 (weekly low Mar.27) seconded by 98.00 (200-day SMA) and then 97.87 (61.8% Fibo retracement of the 2017-2018 drop).
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