- The DXY index reaches new highs above the 94.00 level.
- The US elections continue to draw investors’ attention on Wednesday.
- The US ISD non-manufacturing PMI report will be released at the start of the American session.
The US Dollar DXY Index, which measures the strength of the dollar against a basket of major currencies, keeps the upside bias unchanged and rises above the 94.00 level during the European session on Wednesday. At the time of writing, the DXY index is moving back slightly below the round level.
US dollar index focuses attention on election results
The DXY index reverses Tuesday’s negative price action and is recording strong earnings above the 94.00 level, as the results of the US elections remain very tight so far.
In fact, the Democratic candidate Joe Biden appears to be leading the race to the White House, but by a small margin, while incumbent President Trump said he plans to go to the Supreme Court after qualifying the election as a fraud.
Meanwhile, the DXY index rose to new monthly highs around 94.30 earlier in the session, only to pull back shortly after and before the release of key US data.
Wednesday’s calendar includes ADP’s private sector jobs report, trade balance figures, weekly mortgage applications, and ISM’s non-manufacturing PMI.
What can we expect around the USD?
The DXY Index rises above the 94.00 level again amid increasing caution among investors as the US elections are unexpectedly tight. The continuation of the dollar’s bullish momentum depends on the very short-term election results, as well as risk aversion arising from the impact of the coronavirus pandemic on the world economy. Later in the week, the dollar is expected to remain under pressure in light of the release of key data and the FOMC meeting, this time scheduled for Thursday.
Relevant levels of the US dollar index DXY
At the time of writing, the DXY index is gaining 0.57% on the day, trading at 93.87. A breakout of 94.30 (November 3 high) would open the door to 94.74 (September 25 high) and 96.03 (50% Fibonacci retracement of the 2017-2018 dip). On the downside, immediate support is at 93.09 (Nov 3 low), followed by 92.47 (Oct 21 low) and 91.92 (23.6% Fibonacci retracement of 2017-2018 dip).
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Credits: Forex Street
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