US Dollar clings to recovery gains, around 96.00 handle ahead of US macro data
• A fresh wave of global risk-aversion trade underpinned the USD’s safe-haven demand.
• Fears of inverting yield curve/US government shutdown seemed to cap additional gains.
• Today’s US Q3 GDP growth figures and durable goods orders eyed for some fresh impetus.
The greenback, as measured by the US Dollar Index (DXY) built on overnight modest rebound and recovered a part of its post-FOMC steep decline to the lowest level since Nov. 20.
Fragile market sentiment, as depicted by collapsing oil prices and the ongoing sell-off in equities, underpinned the greenback's relative safe-haven demand against a basket of major currencies, except the Japanese Yen.
The recovery move, so far, has been tepid and is likely to remain capped amid the threat of a possible US government shutdown and a follow-through slide in the US Treasury bond yields.
This coupled with renewed fears of an inversion in the yield curve, seen as a reliable indicator of a recession down the road, might further collaborate towards keeping a lid on any runaway rally.
Market participants now look forward to the US economic docket, highlighting the release of final Q3 GDP growth figures and durable goods order data, for some fresh impetus on the last trading day of the week.
Against the backdrop of the US Treasury Secretary Mnuchin's overnight comments, saying that the US can deliver a 3.0% growth in 2019, a stronger than expected US macro data might aggravate the short-covering bounce amid relatively thin liquidity conditions ahead of the year-end holiday season.
Technical levels to watch
Dollar Index Spot
Today Last Price: 96.56
Today Daily change: 11 pips
Today Daily change %: 0.114%
Today Daily Open: 96.45
Previous Daily SMA20: 97.02
Previous Daily SMA50: 96.64
Previous Daily SMA100: 95.94
Previous Daily SMA200: 94.39
Previous Daily High: 97.04
Previous Daily Low: 96.17
Previous Weekly High: 97.71
Previous Weekly Low: 96.36
Previous Monthly High: 97.7
Previous Monthly Low: 95.68
Previous Daily Fibonacci 38.2%: 96.5
Previous Daily Fibonacci 61.8%: 96.71
Previous Daily Pivot Point S1: 96.07
Previous Daily Pivot Point S2: 95.68
Previous Daily Pivot Point S3: 95.2
Previous Daily Pivot Point R1: 96.94
Previous Daily Pivot Point R2: 97.42
Previous Daily Pivot Point R3: 97.81