DXY continues to lose steam and is approaching 92.00.
Following the holiday on Monday, US markets resume normal trading.
Later in the program, ISM Non-Manufacturing will take center stage.
On Tuesday, the greenback extends its bearish note to the neighborhood of the 92.00 yardstick in terms of the US Dollar Index (DXY).
Following Friday’s peaks in the 92.70/75 zone, the index loses territory for the third session in a row and is under significant downside pressure.
Meanwhile, market investors are continuing to cash out some of the dollar’s recent strong gains. Indeed, Friday’s Payrolls data appears to have spurred a profit-taking mindset in the dollar, causing the surge in DXY to pause.
While US markets gradually return to normal activity following Monday’s Independence Day vacation, the ISM Non-Manufacturing Index is expected to draw the most attention. The final Markit Services PMI for June and the IBD/TIPP Index will be released as additional data.
So far, the rise in DXY appears to have ran out of steam around 92.70. While the latest Payrolls statistics may have disappointed USD bulls, they are nonetheless respectable and indicative of the labor market’s continued progress. The increase in risk aversion on the back of new concerns about the Delta strain of the coronavirus, strong fundamentals, high inflation, and tapering prospects, particularly after the most recent FOMC event, appears to justify investors’ shift in mood toward the dollar.
This week’s major events in the United States include: MBA Mortgage Applications, FOMC Minutes (Wednesday) – Initial Claims, Consumer Credit Change ISM Non-Manufacturing (Tuesday) (Thursday).
On the back boiler, there are a number of important considerations to consider: Biden’s initiatives, totaling over $6 trillion, to help infrastructure and families. Under Biden’s administration, there was a trade war between the United States and China. Speculation tapering vs. economic recovery Real interest rates in the United States vs. Europe. Is it possible that the US fiscal stimulus will cause the economy to overheat?
Now trading at 92.11, the index is down 0.13 percent and confronts support at 91.51 (weekly low June 23), 91.41 (200-day SMA), and ultimately 89.53. (monthly low May 25). A breakout of 92.69 (weekly high July 1) on the upside would lead to 93.00 (round level) and finally 93.43. (2021 high Mar.21)./n
