US Dollar Index looks to 98.00 post-data
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US Dollar Index looks to 98.00 post-data

  • DXY stays close to the key 98.00 barrier.
  • US Retail Sales expanded 0.7% MoM in July.
  • Industrial Production contracted 0.2% MoM in July.

The US Dollar Index (DXY), which tracks the Greenback vs. a bundle of its main rivals, is trading flat in levels just below 98.00 the figure on Thursday.

US Dollar Index focused on yields, data

The index is exchanging gains with losses in the second half of the week, always at shouting distance from recent tops in the area just beyond the 98.00 mark.

Alleviated jitters on the US-China trade front coupled with the upbeat mood ahead of the upcoming meeting between both parties in the US at some point in the next month have been sustaining the improved sentiment in the buck and lifted DXY back to the 98.00 neighbourhood.

In addition, positive results from the US docket have also collaborated with the upside. In fact, today’s Retail Sales expanded more than expected during July, adding to above-estimates prints from both the Philly Fed index and the NY Empire State Index. On the not-so-bright side, Industrial Production and Capacity Utilization have missed forecasts.

Later in the NA session, Business Inventories, the NAHB index and TIC Flows are also due.

What to look for around USD

Trade concerns, while still unabated and in combination with the current inversion of the yield curve, carry the potential to spark further ‘insurance cuts’ by the Federal Reserve and thus undermine the constructive prospects of the buck in the next months. Opposed to this view emerges the Greenback’s safe have appeal, the status of ‘global reserve currency’, so far solid US fundamentals vs. overseas economies and the less dovish stance from the Federal Reserve (as per the latest FOMC event).

US Dollar Index relevant levels

At the moment, the pair is gaining 0.12% at 98.07 and faces the next resistance at 98.37 (monthly high May 23) followed by 98.93 (2019 high Aug.1) and the 99.89 (monthly high May 2017). On the other hand, a break below 97.70 (21-day SMA) would aim for 97.21 (low Aug.6) and then 96.96 (200-day SMA).

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