US Dollar climbs to fresh tops above 100.00

The US Dollar Index (DXY), which tracks the greenback vs. a bundle of its main competitors, is extending the recovery to fresh peaks beyond 100.00 the  |  02/04/2020 14:46
  • DXY reclaims the 100.00 barrier, or 5-week highs.
  • Initial Claims surged by nearly 6.7M during next week.
  • Durable Goods Orders, Factory Orders next on the docket.

The US Dollar Index (DXY), which tracks the greenback vs. a bundle of its main competitors, is extending the recovery to fresh peaks beyond 100.00 the figure.

US Dollar Index in multi-week highs

The index continues to recover ground lost in the past week and it is already trading above the key barrier at the 100.00 mark on the back of the re-emergence of the risk-off sentiment.

In addition, the increasing selling bias in the dollar’s rivals, namely the euro, the sterling and the yen, continues to lend support to DXY in a context dominated by the developments from the coronavirus.

In the docket, another dismal reading from the usual report on the US labour market saw Initial Claims surging by a new record of 6.648M during last week, adding to the previous 3.3M build. At these figures, the jobless rate would be around 10%, the highest level recorded in 2009. Still on the labour market, the Challenger Job Cuts rose by 222.228K in March, expanding almost 267% from a year earlier.

On the brighter side (if any), the trade deficit shrank to $39.90 billion during February from January’s $45.5 billion deficit. Later in t the NA session, February’s Factory Orders and Durable Goods Orders are also due.

What to look for around USD

DXY has regained the upper hand so far this week after bottoming out in the 98.30 region in past sessions. In addition, the greenback has so far managed to keep business above the key 200-day SMA and therefore maintaining the constructive outlook while re-targeting the triple-digit barrier. However, speculation of extra stimulus carries the potential to undermine the recovery in the buck and thus leaves the upside somewhat limited, all against the backdrop of unremitting concerns around the impact of the coronavirus on the US economy.

US Dollar Index relevant levels

At the moment, the index is gaining 0.65% at 100.13 and a breakout of 100.49 (78.6% Fibo retracement of the 2017-2018 drop) would expose 102.99 (2020 high Mar.20) and finally 103.65 (monthly high December 2016. On the other hand, the next support emerges at 98.27 (weekly low Mar.27) seconded by 98.04 (200-day SMA) and then 97.87 (61.8% Fibo retracement of the 2017-2018 drop).

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