- DXY accelerates the downside to the 93.20 region.
- Risk-on mood keeps hurting the safe haven dollar.
- US Wholesale Inventories, oil rig count coming up next.
The US Dollar Index (DXY), which gauges the buck vs. a bundle of its main rivals, remains under pressure and navigates the area of 2-week lows in the 93.20 zone.
US Dollar Index risks a move to 93.00… and below
The index drops to multi-session lows in the 93.20/15 band at the end of the week in a context favourable to the riskier assets, particularly after recent news citing US policymakers could resume talks involving another stimulus bill.
In fact, DXY has almost fully retraced the bullish attempt seen in mid-September and threatens to extend the downtrend if the 55-day SMA (93.29) is breached on a sustainable fashion.
Nothing worth mentioning data wise in the US calendar on Friday, with only the monthly release of Wholesale Inventories scheduled for later in the NA session followed by the weekly report on US drilling activity by Baker Hughes.
What to look for around USD
The index appears to be moving into a consolidative phase, always below the key 94.00 barrier. Occasional bullish attempts in DXY, however, are (still) seen as temporary, as the underlying sentiment towards the greenback remains cautious-to-bearish. This view is reinforced by the “lower for longer” stance from the Federal Reserve, hopes of a strong recovery in the global economy, the negative position in the speculative community and political uncertainty ahead of the November elections. The resumption of market chatter surrounding another stimulus package is also weighing on the dollar.
US Dollar Index relevant levels
At the moment, the index is losing 0.40% at 93.20 and faces the next contention at 92.70 (weekly low Sep.10) followed by 91.92 (23.6% Fibo of the 2017-2018 drop) and then 91.80 (monthly low May 2018). On the other hand, a break above 94.20 (38.2% Fibo retracement of the 2017-2018 drop) would aim for 94.74 (monthly high Sep.25) and finally 94.93 (100-day SMA).
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