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  • DXY remains bid and approaches the key 94.00 yardstick.
  • Nonfarm Payrolls disappointing markets at 661K in September.
  • Final September Consumer Sentiment, Factory Orders are next on tap.

The greenback is closing the week on a firm tone and pushing the US Dollar Index (DXY) back to the 94.00 region.

US Dollar Index underpinned by risk-off trade

Following four consecutive sessions with losses, the index finally regains the smile on Friday, although weekly gains remain limited around the 94.60/70 band for the time being.

The resumption of the risk aversion in the wake of news that President Trump was infected with coronavirus has been sustaining the demand for the buck while keeping its main rivals depressed.

In the us docket, September’s Nonfarm Payrolls showed the economy added 661K jobs vs. the 850K forecasted, while the unemployment rate eased to 7.9% from 8.4%. later in the session, the final Consumer Sentiment gauge for the month of September and Factory Orders during August will close the weekly docket across the Atlantic.

What to look for around USD

The index remains on the defensive so far this week, coming under selling pressure after recent 2-month tops near 94.70 (September 25). Occasional bullish attempts in DXY are (still) seen as temporary, however, 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 and over further monetary/fiscal stimulus.

US Dollar Index relevant levels

At the moment, the index is gaining 0.13% at 93.85 and a break above 94.74 (monthly high Sep.25) would open the door to 95.22 (100-day SMA) and finally 96.03 (50% Fibo of the 2017-2018 drop). On the other hand, the next contention is located at 93.56 (weekly low Oct.1) followed by 92.70 (weekly low Sep.10) and then 91.92 (23.6% Fibo of the 2017-2018 drop).