- DXY alternates gains and losses in the region 100.30.
- Monday, the American-Chinese trade war remains at the center of the scene.
- Powell, FOMC minutes, PMI flash, Fedspeak of relevance this week.
The greenback, when followed by the US dollar index ((DXY), looks for a direction in zone 100.30 at the start of the week.
US dollar index focuses on trade and data
The index is trading in a narrow range on Monday as investors continue to measure the recent resumption of the US-China trade dispute as well as progress in reopening the economy amid the coronavirus crisis.
In fact, risk appetite trends continue to watch renewed excitement between the United States and China after the latest news that the White House has restricted Chinese giant Huawei’s access to state-made chipsets -United Friday. The news adds to the already growing conflict after the Trump administration criticized China for mismanaging the coronavirus epidemic.
Later in the week, full attention will be paid to Chef Jerome Powell’s testimony with Fedspeak, the FOMC minutes, initial claims, and the Philadelphia Fed Manufacturing Index.
What to Look for around the USD
The greenback started the week on a cautious note, still vigilant on the American-Chinese commercial front and the gradual return to a certain normalcy of the American economy. Supporting the momentum surrounding the greenback is emerging the current environment of “flight to security”, helped by its status as a global reserve currency and a store of value. The dollar also gained additional support after J. Powell of the Fed ruled out negative rates in his recent testimony.
Relevant levels of the US dollar index
For the moment, the index is losing 0.01% at 100.35 and faces the next support at 99.49 (SMA 55 days) followed by 99.12 (weekly low of May 11) then 98.57 (more monthly low from May 4). On the other hand, a breakout of 100.93 (highest weekly / monthly on April 6) would open the door to 101.34 (highest monthly of April 10, 2017) and finally to 102.25 (highest monthly of 9 March 2017).