- DXY sails without a clear direction in the low 93.00s.
- US 10-year yields remain lined up around 1.33% on Wednesday.
- All attention remains on the FOMC meeting later in the NA session.
The US dollar DXY index, which measures the strength of the dollar against a basket of major currencies, moves within a narrow range in the region of 93.20 in the middle of the week.
DXY index remains cautious ahead of the Fed
The DXY index broadens the consolidation movement for the third consecutive day on Wednesday, although it manages to stay above the key 93.00 region for the time being.
The range movement in the dollar reflects the same performance in US 10-year benchmark yields, hovering in the region of 1.33%. as the FOMC event approaches.
Aside from the FOMC meeting in the US data space, weekly MBA mortgage applications will be released first, followed by existing home sales and the EIA report on US crude supplies.
What can we expect around the USD?
The DXY index entered a consolidation phase after hitting recent monthly highs near 93.50 (September 20). Speculation about tapering, higher yields, and some auspicious results in US data keep bullish sentiment around the dollar unchanged in recent days, while the spike in risk aversion from concerns around Evergrande has helped support. the strength of the DXY recently.
Key US Events This Week: RFOMC Meeting, Existing Home Sales (Wednesday) – Initial Jobless Claims, Preliminary Manufacturing PMI, CB Leading Initiate (Thursday) – New Home Sales, President Powell’s Address (Friday).
Eminent Background Topics: Biden’s multi-million dollar plan to support infrastructure and families. Trade conflict between the United States and China under the Biden administration. Reduction of speculation in the face of economic recovery. US real interest rates against Europe. Debt ceiling debate. Geopolitical risks derived from Afghanistan.
Relevant levels of the US dollar DXY index
At the time of writing, the DXY index is gaining 0.02% on the day, trading at 93.21. A break above 93.45 (September 20 high) would open the door to 93.72 (August 20 high) and 94.30 (November 4, 2020 high). On the other hand, the next support is at 92.32 (September 14 low), followed by 91.94 (September 3 low) and finally 91.78 (July 30 low).
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