- The DXY index remains under pressure below the 92.00 level.
- Concerns about the pandemic continue to attract investors’ attention.
- No economic releases are expected on the US calendar in a shorter session on Friday.
The US dollar DXY index, which measures the strength of the dollar against a basket of major currencies, holds up well under pressure during the European session on Friday and flirts with daily lows about 91.90.
DXY US Dollar Index Targets Annual Lows
The DXY index is still on track to close the month with significant losses and opens the door to further decline should it break below 2020 lows in the 91.75 / 70 region, reached on September 1.
Meanwhile, the rapid increase in the number of coronavirus cases in recent hours has overshadowed the optimism coming from the positive news about effective vaccines, although market participants continue to favor risk appetite to the detriment of safe haven USD.
US markets will return to normal activity after the Thanksgiving holiday, albeit in a shorter session than usual. However, all the attention is expected to revolve around “Black Friday” and the performance of retailers.
What can we expect around the USD?
The DXY index remains on the defensive and a visit to the 2020 lows near the 91.70 level is not ruled out on the near-term horizon. The improved risk appetite sentiment has been bolstered by a clearer US political landscape combined with upbeat news on vaccines and better growth prospects. In addition, hopes for additional fiscal stimulus have resurfaced, which together with the Federal Reserve’s “lower rates longer” stance is seen as keeping the USD under additional pressure for now.
Relevant levels of the US dollar DXY index
At the time of writing, the DXY index is down 0.06% on the day, trading at 91.94. The next support is at 91.84 (November 26 low), followed by 91.74 (September 1 low) and 89.22 (April 2018 low). On the other hand, a break of 93.20 (November 11 high), would open the door to 93.39 (100-day SMA) and finally 94.30 (November 4 high).
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