The greenback, when tracked by the US Dollar Index (DXY), has started the week on the negative footing and slips back to the 92.20 area in the wake of the opening bell in Euroland.
US Dollar Index focused on risk trends, data, pandemic
The index resumes the downside and navigates the low-92.00s on the back of the rising preference of investors for the risk-associated assets.
In fact, further positive news regarding a COVID-19 vaccine – this time from biopharmaceutical AstraZeneca – lends extra oxygen to the riskier assets at the beginning of the week and collaborate further with the selling pressure surrounding the buck.
Later in the NA session, the advanced gauges of manufacturing and services PMIs by Markit will take centre stage seconded by the Chicago Fed Index and speeches by San Francisco Fed M.Daly (2021 voter, centrist) and Chicago Fed C.Evans (2021 voter, centrist).
What to look for around USD
The downside momentum in DXY halted just ahead of the 92.00 neighbourhood so far, where some decent contention seems to have turned up. In the meantime, the dollar remains focused on the post-elections scenario and the prospects of the US economy under the Biden administration while monitoring at the same time the impact of the second wave of the pandemic on the economic recovery. On another front, the “lower for longer” stance from the Federal Reserve is expected to keep limiting a potential serious upside in the dollar.
US Dollar Index relevant levels
At the moment, the index is retreating 0.15% at 92.22 and faces the next support at 92.13 (monthly low Nov.9) 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 breakout of 93.20 (weekly high Nov.11) would open the door to 93.57 (100-day SMA) and finally 94.30 (monthly high Nov.4).
