- DXY breaks the 93.00 barrier and hits 4-day highs.
- Optimism around a coronavirus vaccine continues to mount.
- MBA mortgage applications were down 0.5% weekly.
The buoyant momentum of the dollar remains strong and pushes the US Dollar Index (DXY) above 93.00 on Wednesday.
US Dollar Index at Multi-Day Highs
The index resumes higher on Wednesday after Tuesday’s unfinished price action, adding to Monday’s strong bullish move.
The dollar’s momentum appears underpinned by renewed selling pressure hurting the euro, as markets continue to capitalize on recent gains following Pfizer’s announcement of its coronavirus vaccine.
Hardly any news from the US data space, with just weekly MBA mortgage applications contracting 0.5%.
What to look for around USD
The DXY recovery appears so far limited by the 93.00 area. Meanwhile, the dollar remains focused on the US post-election scenario, where all eyes are (still) on President Trump and his possible attempts to challenge some results in various states. From a more macro point of view, the impact of the second wave of the pandemic on the global economy could favor the occasional resurgence of risk aversion and thus lend some support to the dollar, while further progress with on COVID-19 vaccines should support momentum in the risk space. Furthermore, the Federal Reserve’s “lower longer” stance is expected to continue to limit DXY’s upside potential.
Relevant levels
For the time being, the index is up 0.40% to 93.08 and a breakout of 93.14 (November 11 monthly high) would open the door to 93.29 (55-day SMA) and finally 94.30 (November 4 monthly high) . On the other hand, immediate support emerges at 92.13 (November 9 monthly low) followed by 91.92 (23.6% Fibonacci from the 2017-2018 drop) and then 91.80 (May 2018 monthly low).
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Credits: Forex Street
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