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  • DXY comes under pressure and drops to the 99.60 area.
  • US-China trade talks expected to resume next week.
  • Non-farm Payrolls for the month of April are next on the docket.

The US Dollar Index (DXY), which tracks the greenback vs. a bundle of its main competitors, has broken below the 100.00 mark amidst a renewed wave of selling pressure.

US Dollar Index now looks to data, trade

The index is losing ground for the second session in a row at the end of the week, breaching the key support at 100.00 the figure and clinching new 3-day lows in the 99.70/60 band.

In fact, the buck came under pressure on the resumption of the sentiment towards the riskier assets, all in response to easing concerns on the US-China trade front. Indeed, both countries are expected to resume trade talks at some point next week, according to latest news.

In the docket, it is Payrolls-day, with markets’ consensus looking for a loss of around 20 million jobs during last month and an increase of the jobless rate to nearly 17% (from 4.4% in March).

What to look for around USD

The greenback came under renewed downside pressure in the second half of the week on the back of the improved mood in the risk-complex and ahead of key releases in the US calendar. In the meantime, investors have now shifted the attention to the US-China trade war, while the country keeps planning the gradual re-opening of the economy. Supporting the momentum around the greenback emerges the current “flight-to-safety” environment, helped by its status of “global reserve currency” and store of value. On another front, and following the FOMC event, the Fed is expected to stay on the loose end of the monetary policy stance, at least until the coronavirus crisis abates.

US Dollar Index relevant levels

At the moment, the index is losing 0.09% at 99.75 and faces immediate contention at 98.57 (weekly low May 4) followed by 98.37 (200-day SMA) and then 97.87 (61.8% Fibo of the 2017-2018 drop). On the other hand, a break above 100.40 (weekly high May 7) would open the door to 100.49 (78.6% Fibo of the 2017-2018 drop) and finally 100.93 (weekly/monthly high Apr.6).