Search ForexCrunch
  • DXY stays fragile and approaches the 99.00 mark.
  • US equities started the week on a soft note.
  • Import/Export Prices, Fedspeak coming up next in the docket.

The US Dollar Index (DXY), which tracks the greenback vs. a bundle of its main competitors is extending the weekly leg lower and approaches the key support at 99.00 the figure.

US Dollar Index focused on COVID-19, risk trends

The index charted and inconclusive session at the beginning of the week and it has been navigating within the negative territory in the Asian trading session on Tuesday.

Persistent concerns over the coronavirus and its impact on the US economy echoed on equity markets on Monday and left the buck exposed to further declines in the near term.

On another note, Fed’s VP R.Clarida noted the Fed would not need to support the economy indefinitely, while Atlanta Fed R.Bostic showed optimism on a robust rebound after the coronavirus crisis is over.

Later in the NA session, March’s Import/Export Price Index are due seconded by speeches by St.Louis Fed J.Bullard (2022 voter, dovish), Chicago Fed C.Evans (2021 voter, centrist) and Atlanta Fed R.Bostic (2021 voter, centrist).

What to look for around USD

DXY has started the second consecutive week on a bearish fashion following the recently announced Fed measures and further deterioration of the US labour market. 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 receding 0.25% at 99.24 and faces the next support at 99.14 (weekly low Apr.13) followed by 98.96 (55-day SMA) and finally 98.27 (weekly low Mar.27). On the flip side, a break above 100.49 (78.6% Fibo retracement of the 2017-2018 drop) would open the door to 100.93 (weekly/monthly high Apr.6) and then 101.34 (monthly high Apr.10 2017).