US dollar DXY index retreats from highs, holding above 93.00 level

• The DXY index rises above the 93.00 level on Tuesday.
• Risk aversion continues to dominate sentiment so far this week.
• Consumer confidence, durable goods orders and the house price index are prominent on today’s economic calendar.

The US Dollar DXY Index, which measures the strength of the dollar against a basket of major currencies, is struggling to find direction near the 93.00 level, while retreating from the previous move to recent highs in the 93.10 / 15 region.

US dollar DXY index focuses attention on pandemic and data

The DXY index has looked to extend Monday’s gains, climbing above the 93.00 level on Tuesday and approaching the key resistance zone near 93.30, where the 55-day SMA and the 6-month resistance line coincide.

Market sentiment remains bitter due to the Diminished hopes of further fiscal stimulus, at least before the November elections, and the increasing spread of the coronavirus pandemic in the United States and Europe.

Further, speculations of a pessimistic message in the ECB event at the end of the week they also boosted risk aversion sentiment.

During the American session, the focus of attention is expected to be on the publication of consumer sentiment measured by the Conference Board, followed by durable goods orders, the housing price index, the Richmond Fed manufacturing indicator and the API weekly report on crude oil.

What can we expect around the USD?

The DXY index managed to leave behind the downward pressure observed during the past week and has recovered the level of 93.00 so far this week. The current recovery of the dollar comes after a change of opinion among investors in response to the impact of the pandemic on the prospects for global growth, as well as the diminishing chances of a deal between Democrats and Republicans on a new bill. stimulus. However, sentiment on the dollar is expected to deteriorate in the event of a “blue wave” after the presidential election next month, while the Fed’s “longer down” stance also limits bullish attempts. occasional.

Relevant levels of the US dollar index DXY

At the time of writing, the DXY index is down 0.04% on the day, trading at 93.03. The next support is at 92.47 (Oct 21 low), followed by 91.92 (23.6% Fibonacci retracement from the 2017-2018 dip) and 91.80 (May 2018 low). On the upside, a break above 93.90 (Oct 15 high), would expose 94.20 (38.2% Fibonacci retracement from the 2017-2018 dip) and finally 94.74 (Sept 25 high).