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US Dollar Index remains flat near 97.70

  • DXY now looks anaemic around 97.70.
  • The key 200-day SMA emerges as the crucial barrier.
  • Housing sector data, weekly Claims, flash PMI due later this week.

The US Dollar Index (DXY), which gauges the greenback vs. a bundle of its main rivals, is trading within a consolidative mood around the 97.70 region.

US Dollar Index looks to the 200-day SMA

The index is looking to add to Friday’s gains and extend the positive streak for another session on Monday, managing to regain the 97.70 neighbourhood, home of the key 200-day SMA.

Positive results in the US docket as of late, higher US yields in response to the risk-on environment have been all sustaining the recent recovery in the buck to YTD highs in the 97.70/75 band.

Later in the week, the US docket will show results from the housing sector, usual weekly Claims as well as advanced PMIs for the month of January.

What to look for around USD

DXY regained upside momentum during last week and managed to record fresh 2020 highs in the proximity of 97.70, always sustained by positive results and the prevailing risk-on trade. In the meantime, investors are now looking to domestic data releases for direction in the near-term and further bullish attempt in the buck should keep targeting the key 200-day SMA in the 97.70 region. Above this level, DXY should regain the constructive view, always underpinned by the current ‘wait-and-see’ stance from the Fed (confirmed once again at the latest FOMC minutes) vs. the broad-based dovish view from its G10 peers, the dollar’s safe haven appeal and its status of ‘global reserve currency’.

US Dollar Index relevant levels

At the moment, the index is up 0.04% at 97.68 and a breakout of 97.73 (2020 high Jan.20) would open the door to 97.87 (61.8% Fibo of the 2017-2018 drop) and finally 97.91 (100-day SMA). On the other hand, initial contention emerges at 97.09 (weekly low Jan.16) followed by 96.36 (monthly low Dec.31) and finally 96.04 (50% Fibo of the 2017-2018 drop).

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