- DXY alternates gains with losses in the 100.30 region.
- US-China trade war remains in centre stage on Monday.
- Powell, FOMC minutes, flash PMIs, Fedspeak of relevance this week.
The greenback, when tracked by the US Dollar Index (DXY), is looking for direction in the 100.30 area at the beginning of the week.
US Dollar Index focused on trade, data
The index is trading within a tight range on Monday, as investors continue to gauge the recent pick-up in the US-China trade conflict along with further progress of the re-opening of the economy amidst the coronavirus crisis.
In fact, risk appetite trends continue to look to the renewed effervescence between the US and China following latest news that the White House restricted the access of Chinese giant Huawei to American-made chipsets on Friday. The news adds to the already escalating conflict after the Trump Administration criticized China for the mishandling of the coronavirus outbreak.
Later in the week, all the attention will be on the testimony by Chief Jerome Powell along with Fedspeak, FOMC minutes, Initial Claims and the Philly Fed manufacturing index.
What to look for around USD
The greenback has started the week on a cautious note, always vigilant on the US-China trade front and the gradual return to some normality in the US 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. The dollar has also derived extra support after Fed’s J.Powell ruled out negative rates at his recent testimony.
US Dollar Index relevant levels
At the moment, the index is losing 0.01% at 100.35 and faces the next support at 99.49 (55-day SMA) followed by 99.12 (weekly low May 11) and then 98.57 (monthly low May 4). On the flip side, a breakout of 100.93 (weekly/monthly high Apr.6) would open the door to 101.34 (monthly high Apr.10 2017) and finally 102.25 (monthly high Mar.9 2017).
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