- The DXY index returns part of Monday’s gains and falls back to 92.60.
- The markets’ attention revolves around US policy and the COVID-19 vaccine.
- The NFIB index, the IBD / TIPP index and some speech by members of the Fed will take place during the American session today.
Following strong gains on Monday, the US Dollar DXY Index, which measures the strength of the dollar against a basket of major currencies, now loses some bullish momentum and returns to the 92.60 region.
The DXY US Dollar Index appears limited around the 93.00 level
After bottoming out near 92.10 at the start of the week, the DXY index managed to regain control and closed Monday in positive territory, although it failed to retest and overcome the key barrier at the 93.00 level.
Meanwhile, the US dollar continues to focus attention on the US political scene. after Biden’s victory in the elections November 3, while optimism remains high following Monday’s announcement by US drugmaker Pfizer about its optimistic results in developing a coronavirus vaccine.
During today’s American session, the publication of the NFIB index and the IBD / TIPP index stand out. Additionally, FOMC permanent voters R. Quarles and L. Brainard have speeches scheduled.
What can we expect around the USD?
The DXY index is recovering from recent lows near the 92.00 region, although gains appear to be limited so far by the 93.00 zone. The dollar remains focused on the post-election scenario in the United States, where all eyes are on (still) President Trump and his potential 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 provide some support for the US dollar. On the other hand, further progress should be made regarding COVID-19 vaccines to support the boost in risk appetite. Beyond that, the Federal Reserve’s “lower rates longer” stance is expected to continue to limit serious upside potential in the DXY index.
Relevant levels of the US dollar index DXY
At the time of writing, the DXY index is down 0.02% on the day, trading at 92.80. Immediate support is at 92.13 (November 9 low), followed by 91.92 (23.6% Fibonacci retracement from the 2017-2018 dip) and 91.80 (May 2018 low). On the other hand, a break of 92.96 (November 9 high), would open the door to 93.29 (55-day SMA) and finally 94.30 (November 4 high).
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Credits: Forex Street
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