US Dollar Index remains firm around 100.00
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US Dollar Index remains firm around 100.00

  • DXY keeps the bid tone unchanged above the 100.00 mark.
  • Investors’ attention remains on the re-opening of the US economy.
  • The US private sector lost 20.2 million jobs in April.

The US Dollar Index (DXY), which tracks the greenback vs. a basket of its main competitors, keeps the buying interest well and sound for yet another session on Wednesday.

US Dollar Index retreats from daily highs post-ADP

The index is consolidating the rebound from Monday’s lows, advancing for the third session in arrow and reclaiming the critical barrier at 100.00 the figure on Wednesday.

However, the index lost upside momentum in the area of new multi-day highs around 100.20 after the ADP report showed the US private sector shed 20 million jobs during last month, all ahead of the more relevant Non-farm Payrolls figures due on Friday.

In the meantime, the dollar manages well to keep the buying interest alive despite rising scepticism among investors regarding the gradual re-opening of the US economy.  In fact, consensus on this issue stays pretty divided at the time when several states are already planning to resume their activity in the near-term.

What to look for around USD

The better note in the greenback pushed the index back to the boundaries of the 100.00 mark on Tuesday before losing some impetus, although it keeps navigating the upper end of the weekly range. 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 gaining 0.21% at 100.02 and a break above 100.20 (weekly high May 6) would open the door to 100.49 (78.6% Fibo of the 2017-2018 drop) and finally 100.93 (weekly/monthly high Apr.6). On the downside, the next support is located at 98.57 (weekly low May 4) followed by 98.35 (200-day SMA) and then 97.87 (61.8% Fibo of the 2017-2018 drop).

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