- DXY bullish momentum is holding well near 93.60.
- Pandemic concerns lend additional sustenance to risk aversion.
- The advanced US trade deficit narrowed to $ 79.37 billion in September.
Dollar Extends Buying Momentum and Tests Weekly Highs at 93.60 Zone When Tracked the US dollar index (DXY).
US Dollar Index Supported by Risk Averse Climate
The index extends its march north in the middle of the week and reaches the level of 93.60 due to the prevailing risk aversion in global markets.
Indeed, the rise in coronavirus cases and the re-implementation of lockdown-like measures across Europe continue to support the resumption of risk aversion and demand for safe havens.
In the US data space, advanced trade figures for the month of September showed that the trade deficit is expected to narrow to $ 79.37 billion. At the beginning of the session, weekly mortgage applications expanded 1.7% according to MBA.
What to look for around USD
The index manages to regain the area above the key 93.00 barrier so far this week. The current recovery of the dollar comes in response to the impact of the COVID-19 pandemic on global growth prospects, as well as the diminishing chances of a deal between Democrats and Republicans on a new stimulus bill. However, the dollar stance is likely to deteriorate in the event of a “blue wave” after next month’s presidential election, while the Federal Reserve’s “lower for longer” stance also limits bullish attempts. occasional.
Technical levels
At the moment, the index is gaining 0.52% to 93.57 and a break above 93.90 (Oct 15 weekly high) would expose 94.20 (38.2% Fibonacci retracement from 2017-2018 drop) and finally 94.74 (high monthly of September 25). On the other hand, the next support is located at 92.47 (monthly low of October 21) followed by 91.92 (23.6% Fibonacci from the fall of 2017-2018) and then 91.80 (monthly low of May 2018).
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Credits: Forex Street
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