- The index loses more momentum and is approaching 89.00.
- Investors continue to favor the risk complex to the detriment of the dollar.
- The FOMC minutes, the ADP report and factory orders are the next major events on today’s economic calendar.
The dollar, in terms of the US dollar index (DXY), continues to lose ground and is trading at new lows in the region of 89.20.
US Dollar Index Looks at Georgia and Data
The index is trading at a loss for the fourth consecutive session on Wednesday, reaching the 89.20 region, new lows since March 2018, simultaneously opening the door for a possible challenge from the 89.00 mark.
The risk complex remains the sole beneficiary of the current upbeat sentiment among market participants, particularly following mounting speculation of a Democratic victory in Georgia, and with it, the increasing likelihood of additional stimulus under the Biden administration.
In the data space, the ADP report will take center stage in the first shift, seconded by factory orders, Markit’s final services PMI, the weekly EIA report and the minutes of the last FOMC meeting.
On Tuesday, the ever-relevant ISM Manufacturing surprised to the upside at 60.7 during the final month of 2020, adding to the view that there is still a strong economic rebound on the table.
At time of writing, the index is falling 0.16% at 89.29 and shows close support at 89.22 (today’s low, January 6), before dropping to 88.94 (March 2018 monthly low) and 88.25 (monthly low of March 2018). February 2018).
On the upside, a breakout of 91.01 (weekly high made on December 21), would point towards 91.23 (weekly high on December 7), on its way to 91.92 (23.6% of Fibo from the fall of 2017-2018).