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US Dollar Index in fresh YTD peaks around 98.40

  • DXY keeps the bid tone around 98.40, yearly highs.
  • Risk-on trade keeps supporting the buck.
  • January’s Payrolls next of relevance on Friday.

The US Dollar Index (DXY), which gauges the greenback vs. a bundle of its main competitors, keeps the buying bias well and sound on Thursday around the 98.40 region, or 2020 tops.

US Dollar Index now looks to NFP

The index keeps navigating a tight range on Thursday, although it seems enough to stay close to new yearly highs in the 98.35/40 band.

Positive news around the Wuhan coronavirus plus auspicious headlines from the US-China trade front have been sustaining the recent change of heart among investors and sponsored the weekly recovery to levels beyond 98.00 the figure.

Additionally, positive results from the US calendar have been also lending extra legs to the upside momentum in DXY.

In the US data universe, Initial Claims rose at a weekly 202K, taking the 4-Week Average to 211.75K from 214.75K. Further data saw the Challenger Job Cuts rising to 67.735K in January (from 32.843K).

Later on Friday, the current rally in the buck will surely be put to the test in light of the publication of January’s Non-farm Payrolls (160K exp.).

What to look for around USD

The index is prolonging the positive streak and managed to clinch new yearly peaks beyond 98.30, always against the backdrop of persistent risk-on sentiment and positive results from US fundamentals. Following the neutral/dovish message from the FOMC, investors are now focused on key indicators to be released later this week as well as any news on the Wuhan coronavirus. The recent breakout of the 200-day SMA has reasserted the constructive view on the dollar, which is expected to remain underpinned by the current ‘wait-and-see’ stance from the Fed vs. the broad-based dovish view from its G10 peers, auspicious results from the US fundamentals, the dollar’s safe haven appeal and its status of ‘global reserve currency’.

US Dollar Index relevant levels

At the moment, the index is advancing 0.11% at 98.38 and a break above 98.54 (monthly high Nov.29 2019) would aim for 98.93 (high Aug.1 2019) and finally 99.00 (psychological mark). On the other hand, immediate contention emerges at 97.87 (68.2% Fibo of the 2017-2018 drop) followed by 97.72 (200-day SMA) and then 97.35 (weekly low Jan.31).

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