- The DXY Index climbs to multi-day highs near 93.30 on Wednesday.
- The advance of the pandemic and nervousness before the US elections support the dollar.
- Data from MBA weekly mortgage applications and preliminary US trade balance will be released today.
The US dollar index DXY, which measures the strength of the dollar against a basket of major currencies, resumes rally above 93.00 level on Wednesday.
DXY US Dollar Index on Multi-Day Highs
The DXY index gains additional strength at the start of the European session on Wednesday and extends the rally above the 93.00 level.
In fact, the relentless advance of the coronavirus pandemic coupled with the re-implementation of restrictions in several countries seems to support safe haven US dollar demand on Wednesday.
Further, declining hopes of further stimulus to the US economy, combined with the uncertainty surrounding the presidential elections, also contributes to the renewed inflow of money in the USD.
In terms of US data, weekly MBA mortgage application data will be released today, followed by preliminary trade balance figures for the month of September and weekly supply report of crude oil from the EIA.
What can we expect around the USD?
The DXY index manages to rally above the key 93.00 barrier so far this week. The current recovery of the dollar comes in response to the impact of the COVID-19 pandemic on global growth prospects, as well as the diminishing chances of an agreement between Democrats and Republicans on a new stimulus bill. However, the dollar stance is likely to deteriorate in the event of a “blue wave” after the presidential election next month, while the Federal Reserve’s “lower for longer” stance also limits attempts. occasional bulls.
Relevant levels of the US dollar index DXY
At the time of writing, the DXY index is gaining 0.21% on the day, trading at 93.28. A break above 93.90 (October 15 high), would expose 94.20 (38.2% Fibonacci retracement from the 2017-2018 dip) and 94.74 (September 25 high). On the other hand, the next support is at 92.47 (October 21 low), followed by 91.92 (23.6% Fibonacci retracement from the 2017-2018 drop) and 91.80 (May 2018 low).
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Credits: Forex Street
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