US Dollar DXY Index advances to daily highs above 91.30

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  • The DXY index recovers Monday’s retracement and rises above the 91.30 region.
  • US 10-year yields are with support in the 1.60% region so far.
  • Factory orders, the trade balance, and the IBD / TIPP index stand out on today’s US economic calendar.

The US dollar DXY index, which measures the strength of the dollar against a basket of major currencies, regains upward traction and rises to daily highs just above the 91.30 level during the European session on Tuesday.

US Dollar Index DXY focuses attention on risk trends and data

The DXY index resumes its rise after the moderate retracement recorded at the beginning of the week and rises back above the 91.00 level, flirting at the same time with the weekly highs and the 20-day SMA.

In the meantime, the narrative of the US economic rebound appears to have resurfaced among investors, which suggests a rate adjustment by the Fed sooner than expected and benefits the USD.

In his speech Monday at a National Community Reinvestment Coalition conference, President Powell said the economy “not out of the woods yet“, although it continues to reopen and collaborate with”stronger economic activity and job creation“.

In terms of US data, March factory orders, trade balance figures, IBD / TIPP, and API’s weekly crude oil supplies report will be released today. USA

What can we expect around the USD?

The strong retracement in the DXY index in April appears to have found decent support in the 90.40 region (April 29), with a fairly strong bounce above the 91.00 level in the following sessions. Optimism regarding the imminent full reopening of the U.S. economy has been gaining more traction of late, supported at the same time by the relentless strength of national fundamentals, the strong launch of the vaccination campaign, and the resurgence of market rumors regarding an earlier-than-expected adjustment in bond buying by the Fed. The latter occurs despite the Fed’s efforts to lower this scenario, at least for the next few months.

Key events in the US this week: Factory Orders (Tuesday) – ADP Report, ISM Non-Manufacturing PMI (Wednesday) – Initial Jobless Claims (Thursday) – NFP Non-Farm Payrolls, Unemployment Rate (Friday).

Eminent Background Issues: Biden’s bill to boost infrastructure worth about $ 3 trillion. Trade conflict between the United States and China under the Biden administration. Reduction of speculation in the face of economic recovery. Real US interest rates versus Europe. Could US fiscal stimulus cause overheating?

Relevant levels of the US dollar DXY index

At the time of writing, the DXY index is gaining 0.39% on the day, trading at 91.32. A breakout of 91.42 (April 21 high), would open the door to 91.72 (50-day SMA) and finally 91.95 (200-day SMA). On the other hand, the next support is at 90.42 (April 29 low), followed by 89.68 (February 25 low) and 89.20 (January 6 low).

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