- DXY accelerates the decline towards the 97.40 zone on Wednesday.
- Optimism about the reopening of the economy strengthens the climate of risk.
- US ADP report, Factory Orders, ISM Non-Manufacturing next of relevant.
The greenback remains well on the defensive so far this week and is now dragging the US dollar index ((DXY) at band 97.40 / 35, or new lows of 3 months.
US dollar index focuses on trends and risk data
The index continues its relentless southward march for the seventh consecutive session on Wednesday and has already reached levels seen for the last time in mid-March around 97.40, still in the current context of preference for the riskiest assets .
In fact, investors seem to favor the lingering optimism surrounding the gradual reopening of the economy, relegating – at least in the very short term – concerns on the US-China trade front and recent civil protests.
Later in the file, the ADP report is first supported by the ISM Non-Manufacturing and Factory Orders. In addition, the EIA will publish its weekly report on the US supply of crude oil.
What to Look for around the USD
The greenback remained under strong pressure at the start of the month, extending the bearish trend well below the 98.00 mark and still in the context of the strong sense of risk on the world markets. In the meantime, the dollar remains vigilant on the American-Chinese trade front, the gradual return to a kind of normalcy in the American economy and the broader tendencies of risk appetite as the main drivers of the action of the price. On the constructive position around the male, the episodes of risk aversion should support investors’ preference for the greenback as a safe haven, as well as its status as a global reserve currency and a store of value.
Relevant levels of the US dollar index
Currently, the index is losing 0.36% to 97.55 and faces immediate contention at 97.33 (monthly minimum on June 3), followed by 97.11 (monthly minimum on November 1, 2019) and finally 96.33 (monthly minimum on December 31, 2019). On the other hand, a break of 98.49 (SMA 200 days) would target 99.04 (SMA 100 days) and finally 99.98 (May 25 high).