- DXY extends losses to the 99.50/40 band on Good Friday.
- The Fed announced an extra $2.3 trillion stimulus plan on Thursday.
- Initial Claims rose by 6.6 million during last week, surpassing estimates.
The greenback, in terms of the US Dollar Index (DXY), is adding to Thursday’s losses and navigates the 99.50/40 band.
US Dollar Index offered post-Fed, looks to COVID-19, data
The index is down for the second consecutive session on Good Friday, picking up extra downside pressure following the recent breakdown of the key support at 100.00 the figure.
The dollar receded further in past hours after the Federal Reserve announced on Thursday another stimulus package in the form of $2.3 trillion destined to small and medium sized businesses, municipalities and the corporate debt market.
Additionally, the US labour market deteriorated further after nearly 6.6 million citizens filed for unemployment during last week (vs. 5.5 million forecasted), adding to the surge in Initial Claims observed in the previous two weeks.
Later in the NA session, US inflation figures tracked by the CPI for the month of March will be the only release of note along with the Monthly Budget Statement.
What to look for around USD
DXY is navigating the second half of the week in a bearish bias following the recently announced Fed measures and further deterioration of the US labour market. In the meantime, all the attention remains on the developments from the coronavirus 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 retreating 0.04% at 99.52 and faces the next support at 98.91 (55-day SMA) followed by 98.27 (weekly low Mar.27) and then 98.15 (200-day SMA). On the other hand, a break above 100.93 (weekly/monthly high Apr.6) would open the door to 101.34 (monthly high Apr.10 2017) and finally 102.99 (2020 high Mar.20).
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