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  • DXY rebounds from lows in the 97.20/15 band on Thursday.
  • The risk-on sentiment is taking a breather ahead of key US data.
  • Initial Claims, Trade Balance figures next of relevance on the docket.

The US Dollar Index (DXY), which gauges the greenback vs. a bundle of its main competitors, has regained some composure on Thursday and manages to reclaim the 97.60 region at the time of writing.

US Dollar Index focused on data, risk trends

The index is finally posting some gains following seven consecutive sessions with losses and is coming back to life after bottoming out in the vicinity of 97.20 on Wednesday.

Despite the corrective upside, the upbeat sentiment in the risk-associated universe remains well and sound among investors and stays always bolstered by hopes of a faster recovery in the global economy.

In addition, positive results from key fundamentals as of late have been also propping up the optimism among traders, relegating at the same time usual concerns on the US-China trade front.

Later in the NA session, weekly Initial Claims will be in the centre of the debate seconded by Trade Balance figures. Furthermore, investors are expected closely follow the ECB monetary policy meeting, where consensus sees the central bank announcing extra stimulus.

What to look for around USD

The greenback remains under heavy pressure at the beginning of the month, prolonging the downtrend well below the 98.00 mark and always against the backdrop of the solid risk-on sentiment in the global markets. In the meantime, the dollar remains vigilant on the US-China trade front, the gradual return to some sort of normality in the US economy and the broader risk appetite trends as main drivers of the price action. On the constructive stance around the buck, bouts of risk aversion should support the investors’ preference for the greenback as a safe haven along with its status of global reserve currency and store of value.

US Dollar Index relevant levels

At the moment, the index is gaining 0.29% at 97.59 and a breakout of 98.49 (200-day SMA) would aim for 99.04 (100-day SMA) and finally 99.98 (high May 25). On the other hand, immediate contention emerges at 97.19 (monthly low Jun.3) followed by 97.11 (monthly low Nov.1 2019) and finally 96.33 (monthly low Dec.31 2019).