US Dollar Index puts the 92.00 mark under pressure

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  • DXY extends the leg lower to the sub-92.00 area.
  • Vaccine hopes, further stimulus supports the risk-on trade.
  • US markets are closed due to the Thanksgiving Day holiday.

The greenback remains under pressure for yet another session and motivates the US Dollar Index (DXY) to slip back below the 92.00 mark in the second half of the week.

US Dollar Index offered on risk trends

The index sheds ground for the third session in a row and trades at shouting distance from the 2020 lows in the vicinity of 91.70 on Thursday.

As usual in past sessions, optimism stemming from the imminence of a coronavirus vaccine, rising hopes of further stimulus – particularly exacerbated after the nomination of J.Yellen to the Treasury – and the start of the Biden’s transition have been all collaborating with the persistent downtrend in the dollar.

In the meantime, the appetite for the risk complex continue to dominate the global markets for the time being and opens the door further to a weaker buck in the near/medium-term.

No activity in the US markets due to the Thanksgiving Day holiday is expected to depress the price action in the global assets on Thursday and Friday.

What to look for around USD

DXY remains on the defensive and does not rule out a visit to the 2020 lows near 91.70 in the short-term horizon. The better mood in the risk-complex was bolstered further by a clearer US political scenario in combination with auspicious vaccine news and better growth prospects. Furthermore, hopes of extra fiscal stimulus have re-emerged and along with the “lower for longer” stance from the Federal Reserve is seen keeping the buck under extra pressure for the time being.

US Dollar Index relevant levels

At the moment, the index is retreating 0.02% at 91.97 and faces the next support at 91.84 (monthly low Nov.26) followed by 91.74 (2020 low Sep.1) and then 89.22 (monthly low Apr. 2018). On the other hand, a breakout of 93.20 (weekly high Nov.11) would open the door to 93.43 (100-day SMA) and finally 94.30 (monthly high Nov.4).

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