- DXY remains bearish tone unchanged on Tuesday.
- Powell will testify before the Senate later in the session.
- The Manufacturing ISM is estimated at 58 in November (from 59.3).
The US Dollar Index (DXY), which measures the dollar against a group of its main rivals, leaves Monday’s advance behind and refocuses on the downside.
US Dollar Index Now Attentive to Data, Powell
The index is trading well defensively at the 91.70 / 60 zone after Monday’s rally.
The stance offered by the dollar has accelerated in recent weeks in response to auspicious headlines about potential coronavirus vaccines, while investors continue to see a strong rebound in the global economy in the coming months.
The US manufacturing ISM fell to 57.5 points in November from the previous 59.3, falling below the 58 expected.
Later in the session, L. Brainard (permanent voter, moderate) of the FOMC, M. Daly of the San Francisco Fed (2021 voter, centrist) and C. Evans of the Chicago Fed (2021 voter, centrist) they should speak later in the session.
What to look for around the USD
The bearish stance does not abandon the dollar and dragged the DXY to fresh yearly lows around 91.50 at the beginning of the week. The better mood in the risk space continues to be bolstered by a clearer US political scene combined with auspicious vaccine news and improved growth prospects. Furthermore, hopes for additional fiscal stimulus have resurfaced and, coupled with the Federal Reserve’s “lower for longer” stance, is seen as keeping the dollar under additional pressure for now.
Technical levels
At the moment, the index is falling 0.26% to 91.63 and faces the next support at 91.50 (November 30 low) followed by 89.22 (April 2018 monthly low) and then 88.94 (March 2018 monthly low). ). On the other hand, a breakout of 93.20 (weekly high on November 11) would open the door to 93.29 (100-day SMA) and finally 94.30 (monthly high on November 4).
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