US Dollar Index turns positive above 93.40
- DXY gives away part of recent gains and retests 93.30.
- The dollar remains cautious ahead of the ECB event.
- Claims, flash Q3 GDP, Pending Home Sales next in the docket.
The greenback starts the second half of the week on an inconclusive note and drags the US Dollar Index (DXY) back to the 93.30 region, where some decent contention has emerged so far.
US Dollar Index focused on data, ECB
The index loses some upside momentum on Thursday following three consecutive daily advances, including fresh multi-day highs in the 93.60/65 band on Wednesday.
The generalized cautious tone in the global markets amidst rising coronavirus concerns has been lending legs to the recent pick-up in the demand for the safe haven dollar, although the rebound seems to have met resistance in the vicinity of 93.70 for the time being.
Also collaborating with the prevailing vigilant stance emerges the ECB event scheduled for later on Thursday, with consensus expecting a dovish tone from the central bank.
In the US data space, usual weekly Claims will take centre stage later in the NA session along with advanced Q3 GDP figures and Pending Home Sales during September.
What to look for around USD
The index managed to regain the area above the key 93.00 barrier so far this week. The current recovery in the dollar comes in response to the impact of the COVID-19 pandemic on the global growth prospects as well as dying chances of a deal between Democrats and Republicans over a new stimulus bill. However, the stance on the dollar is predicted to deteriorate in case Joe Biden wins the November elections, while the “lower for longer” stance from the Federal Reserve also caps occasional bullish attempts.
US Dollar Index relevant levels
At the moment, the index is gaining 0.03% at 93.46 and a break above 93.90 (weekly high Oct.15) would expose 94.20 (38.2% Fibo retracement of the 2017-2018 drop) and finally 94.74 (monthly high Sep.25). On the other hand the next support is located at 92.47 (monthly low Oct.21) followed by 91.92 (23.6% Fibo of the 2017-2018 drop) and then 91.80 (monthly low May 2018).