US Dollar Index tests session tops near 93.00 ahead of data

• DXY looks to extend the rebound and approaches 93.00.
• Investors keep looking to the probable release of another stimulus package.
• Challenger Job Cuts, Initial Claims next on the US calendar.

The greenback is reversing the recent negative stance on Thursday, lifting the US Dollar Index (DXY) to the vicinity of 93.00 following the opening bell in Europe.

US Dollar Index looks to data, politics

The index is alternating gains with losses in the second half of the week, near the key 93.00 mark and against the backdrop of the solid sentiment in the risk-associated universe.

As usual in past sessions, investors remain focused on US lawmakers, as the potential announcement of an extra stimulus package still looks stuck in the ongoing Republican-Democrat debate.

Later in the session, Challenger Job Cuts for the month of July are due seconded by the usual weekly Claims and the speech by Atlanta Fed R.Kaplan (voter, hawkish).

What to look for around USD

The dollar’s recovery appears to have run out of favour in the 94.00 region on Monday, resuming the downside soon afterwards and re-shifting its focus to recent lows in the mid-92.00s (July 31). Looking at the broader picture, investors keep the bearish stance on the currency unchanged against the usual backdrop of a dovish Fed, the unabated advance of the pandemic, US-China effervescence and somewhat diminishing momentum in the economic recovery. Also weighing on the buck, market participants seem to have shifted their preference for other safe havens instead of the greenback on occasional bouts of risk aversion. On another front, the speculative community remained well into the negative territory for yet another week, adding to the idea of a more serious bearish trend in the dollar.

US Dollar Index relevant levels

At the moment, the index is up 0.14% at 92.94 and a break above 93.99 (weekly high Aug.3) would target 94.20 (38.2% Fibo of the 2017-2018 drop) en route to 96.03 (50% Fibo of the 2017-2018 drop). On the downside, the next support is located at 92.55 (2020 low Jul.31) seconded by 91.80 (monthly low May 18) and finally 89.23 (monthly low April 2018).