- DXY range-bound as the pandemic, economic recovery and politics in focus.
- Dallas Fed index, Fed speak eyed.
The dollar index was trading around 94.50 region today, unable to make a directional move.
The index, weighing the dollar value against a basket of currencies, has been on an uptrend in recent weeks. DXY is now trying to move above its six-month resistance line in the 94.50/60 band.
The chances of a breakout remain low as the global markets are trading in a range-bound manner and are near Friday’s closing levels.
The traders will focus on the monthly US labour due on Friday. The Dallas Fed manufacturing index and Cleveland Fed Loretta Mester speech would be the immediate triggers for the dollar. Market participants will also follow the presidential debate between Trump and Biden on Tuesday.
The 94.50/60 levels will be critical for further bullishness in the US dollar, while the bulls are keeping the bias intact as of now in today’s trading. But, a broader view indicates a neutral to bearish sentiments in the greenback and the bullishness might be temporary. The lower for longer policy approach by the US Fed is a major headwind for the dollar. It will also be affected by the hopes of global economic recovery, bearish trader positions, fiscal/monetary stimulus and the upcoming elections in November.