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  • DXY loses further momentum and drops to the vicinity of 93.20.
  • Democrat candidate Joe Bide keeps leading the elections results.
  • Initial Claims, FOMC event next of relevance in the US calendar.

The greenback partially reverses Wednesday’s advance and trades closer to the 93.00 mark when gauged by the US Dollar Index (DXY).

US Dollar Index now looks to FOMC, data

The index trades on a weak note early in the European morning as the vote counting process continues following Tuesday’s elections and with Democrat candidate Joe Biden still leading the way to the White House.

 

 

On the latter, the risk complex manages to pick up extra steam and therefore put the greenback under further downside pressure, somewhat relegating concerns over the progress of the pandemic and its impact on the global growth prospects.

Later in the session, all the attention will be on the FOMC meeting seconded in relevance by the publication of weekly Initial Claims and Challenger Job Cuts.

What to look for around USD

The index failed to extend the move beyond the 94.30 area on Wednesday and instead appears to have resumed the downside towards the 93.00 level. Rising probability of a Biden presidency keeps weighing on the dollar, although prospects of a “blue wave” looks largely diminished. On the more macro view, the impact of the second wave of the pandemic on the economy could favour the re-emergence of the risk aversion and thus some support for the buck. Later in the session, the greenback should remain under the microscope in light of key data releases and the FOMC meeting.

US Dollar Index relevant levels

At the moment, the index is losing 0.19% at 93.30 and faces immediate contention at 93.09 (monthly low Nov.3) followed by 92.47 (monthly low Oct.21) and then 91.92 (23.6% Fibo of the 2017-2018 drop). On the other hand, a breakout of 94.30 (monthly high Nov.3) would open the door to 94.74 (monthly high Sep.25) and finally 96.03 (50% Fibo of the 2017-2018 drop).