- DXY navigates around Monday’s close directionless.
- Yields of the 10-year note surpass 1.80%.
- Existing Home Sales, Richmond Fed gauge next on the docket.
The Greenback, when tracked by the US Dollar Index (DXY), is trading without a cler direction around the 97.30 region.
US Dollar Index focused on data, trade
The index remains parked around Monday’s close in the 97.30 area, alternating gains with losses amidst some renewed optimism on the US-China trade front and rising expectations on the Brexit negotiations.
The current steady stance in the buck comes along the rebound in yields of the US 10-year reference to levels beyond 1.80% on a move from investors away from safe havens
In what it seems an uneventful session, Brexit headlines are expected to dominate the mood in the broader risk-appetite trends as well as developments from the trade sphere. In the US docket, only Existing Home Sales and the Richmond Fed manufacturing gauge are due.
What to look for around USD
The index remains entrenched in the lower bound of the range just above the 97.00 mark albeit rebounding from oversold levels in the daily chart, all amidst rising scepticism on the US-China trade front and a cautious mood in the riskier assets following recent events in the Brexit negotiations. In the meantime, investors’ attention has now shifted to the increasing likeliness of another insurance cut by the Fed at the October meeting amidst some loss of momentum in the US economy, particularly after recent figures from the manufacturing sector, mixed inflation results and some slowdown in consumer spending. On the broader view, the constructive outlook in DXY looks a bit damaged but it still is in play amidst a divided FOMC vs. a broad-based dovish stance from the rest of the G-10 central banks. In addition, the positive view on USD remains well sustained by its safe haven appeal and the status of ‘global reserve currency’.
US Dollar Index relevant levels
At the moment, the pair is losing 0.04% at 97.28 and faces the next support at 97.14 (monthly low Oct.18) seconded by 97.03 (monthly low Aug.9) and then 96.67 (low Jul.18). On the upside, a breakout of 97.38 (200-day SMA) would open the door to 97.79 (100-day SMA) and finally 99.25 (high Oct.9).
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