- DXY sails in a narrow range in the 99.50 region.
- Powell reiterated that the Fed remains responsive to continue supporting the economy.
- The release of the FOMC minutes will be the highlight later Wednesday.
the US dollar index ((DXY), which follows the greenback compared to a bundle of its main competitors, remains for the moment in a rangebound scenario in the middle of the 99.00 years.
US dollar index examines risk trends, FOMC
The index fell for the third consecutive session on Wednesday, while global sentiment remains biased towards the riskiest assets despite optimism following the results of Moderna biotechnology of a potential vaccine seem somewhat attenuated.
Dollar remained listless on Tuesday after Chief Powell reiterated the Federal Reserve’s desire to continue supporting the economy using its “full range of tools”, while also stressing that the Fed and Congress.
In the meantime, the asymmetric and gradual reopening of the US economy has so far remained at the center of the scene, while the coronavirus epidemic is not showing lasting signs of slowing in the United States with more than 92,000 deaths and nearly 1.6 million infected cases.
Later in the US data space, MBA mortgage applications must be supported by the EIA weekly report and the publication of FOMC minutes.
What to Look for around the USD
The greenback started the week on a negative note, falling below the 100.00 mark on Monday following the resumption of risk sentiment in world markets. In the meantime, the dollar remains vigilant on the American-Chinese trade front and the gradual return to a kind of normalcy in the American economy. From a constructive point of view, it remains the refuge of choice among investors, helped by its status as a global reserve currency and a store of value. The dollar also received additional support after J. Powell of the Fed recently excluded negative rates.
Relevant levels of the US dollar index
For the moment, the index is losing 0.10% to 99.48 and faces the next support at 99.23 (weekly low of May 19) followed by 99.12 (weekly low of May 11) then 98, 46 (200 day SMA). On the upside, a break above 100.56 (highest monthly on May 14) would open the door to 100.93 (highest weekly / monthly on April 6) and finally to 101.34 (highest monthly of 10 April 2017).