- DXY keeps pushing higher and trades closer to 94.00.
- Final July Manufacturing PMI came in below consensus at 50.9.
- US ISM Manufacturing coming up next in the calendar.
The US Dollar Index (DXY), which gauges the greenback vs. a bundle of its main rivals, is extending the rebound from last week’s lows and trades at shouting distance from the 94.00 yardstick.
US Dollar Index now looks to ISM
The index is adding to Friday’s gains and is already navigating at pips away from the key barrier at 94.00 the figure on Monday.
The moderate bounce in the dollar came after DXY was navigating in the oversold territory for the last sessions following the sharp sell-off during last month.
Nothing has changed in the macro picture, which remains dominated by the advance of the pandemic, news regarding a potential vaccine and the uneven economic recovery. In the political area, the focus of attention has shifted to a new bout of effervescence between Republicans and Democrats over a new stimulus package.
In the US data space, Markit’s final manufacturing PMI came in below forecasts at 50.9 for the month of July. Later in the session, the ISM will publish its manufacturing gauge for the same period seconded by speeches by FOMC’s J.Bullard and C.Evans.
What to look for around USD
The dollar managed to regain some attention after bottoming out in levels last seen over two years ago well below the 93.00 yardstick. Looking at the broader picture, investors keep the bearish stance on the currency unchanged against the usual backdrop of US-China jitters, the spread of the pandemic and the dovish message from the Fed. 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 gaining 0.49% at 93.91 and a break above 94.20 (38.2% Fibo of the 2017-2018 drop) would open the door to 96.03 (50% Fibo of the 2017-2018 drop) and finally 96.73 (55-day SMA). On the downside, the next support is located at 92.55 (2020 low Jul.31) seconded by 91.80 (monthly low May 18) and finally 89.23 (monthly low April 2018).
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