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  • DXY dropped and bounced off news lows near 93.60.
  • Broad appetite trends continue to favour the riskier assets.
  • US Durable Goods Orders rose 7.3% MoM during June.

The US Dollar Index (DXY), which tracks the greenback vs. a bundle of its main competitors, remains largely on the defensive although it has managed to bounce off lows around 93.60.

US Dollar Index in 2-year lows

The unabated selling pressure around the dollar forced the index to record new 2-year lows in the 93.65/60 band earlier in the session.

In the US data space, headline Durable Goods Orders rose at a monthly 7.3% in June, while Core orders rose 3.3% MoM. Later in the session, the Dallas Fed manufacturing gauge will close the daily docket.

In the meantime, investors’ preference for the risk complex keep the buck under heavy downside pressure, always underpinned by optimism of a strong recovery and hopes of positive results from the upcoming US earnings season.

What to look for around USD

The relentless advance of the coronavirus pandemic in the US and across the world vs. the probability that a COVID-19 vaccine could be out in the medium-term plus the ongoing reopening of global economies are all driving the sentiment in the global markets while keeping the demand for the safe haven dollar well depressed. While bouts of risk aversion are seen supportive of the greenback, these seem quite unlikely, at least in the near-term, in the current context and therefore any rebound in DXY should be deemed as short-lived. On another front, the speculative community kept adding to the offered note around the dollar for yet another week, opening the door to a potential development of a more serious bearish trend in the dollar.

US Dollar Index relevant levels

At the moment, the index is losing 0.57% at 93.81 and faces the next support at 93.61 (2020 low Jul.27) seconded by 93.19 (monthly low June 2018) and then 91.80 (monthly low May 18). On the other hand, a break above 96.03 (50% Fibo of the 2017-2018 drop) would aim for 97.35 (55-day SMA) and finally 97.80 (weekly high Jun.30).