US Dollar Index recedes from tops, back below 100.00

• DXY surpassed the 100.00 mark on Thursday, drops afterwards.
• US Initial Claims surged by nearly 5.3M during last week,
• Leading Index for the month of March is only due on Friday.

The US Dollar Index (DXY), which tracks the greenback vs. a bundle of its main rivals, has abandoned recent tops and returns to the sub-100.00 area on Friday.

US Dollar Index capped above 100.00

The index is shedding some ground following two consecutive daily advances, including Thursday’s surpass of the psychological 100.00 mark and a move to the 100.30 area, where a tough resistance has emerged so far.

In fact, the persistent demand for the safe haven universe has been lending extra oxygen to the buck, always against the backdrop of unremitting concerns surrounding the impact of the coronavirus on the economy. On the latter, President Trump is said to be planning guidelines to re-open the economy at some point in June.

In the US calendar, the only release on Friday will be the Leading Index for the month of March. It is worth recalling that Initial Claims surged by nearly 5.3M during last week, hinting at the probability that the unemployment rate could be nearing the 15% already.

What to look for around USD

DXY has managed to regain composure on the back of the resumption of the “fly-to-safety” environment and reclaimed the 100.00 barrier on Thursday, just to ease to ground afterwards. In the meantime, all the attention remains on the COVID-19 amidst countries extending their lockdown periods, speculation of a global recession and further deterioration of fundamentals. On the supportive side for the buck, market participants seem to prefer the dollar vs. other safe havens like the Japanese yen and the Swiss franc in cases when risk aversion kicks in, all helped by its status of “global reserve currency” and store of value.

US Dollar Index relevant levels

At the moment, the index is losing 0.13% at 99.80 and faces the next support at 99.06 (55-day SMA) seconded by 98.82 (monthly low Apr.15) and finally 98.27 (weekly low Mar.27). On the upside, a break above 100.30 (weekly high Apr.16) would aim for 100.49 (78.6% Fibo retracement of the 2017-2018 drop) and then 100.93 (weekly/monthly high Apr.6).