USD Index regains traction and retests 105.20
|- The index rebounds from recent lows near 105.00.
- Markets’ appear side-lined ahead of the FOMC gathering.
- The US housing sector will be in the limelight later in the session.
The greenback, when tracked by the USD Index (DXY), reverses part of the pessimism seen at the beginning of the week on Tuesday.
USD Index looks well supported around 105.00
The index picks up traction and leaves behind two consecutive sessions of losses on turnaround Tuesday.
In the meantime, the dollar appears well underpinned by the 105.00 neighbourhood for the time being, while the cautious trade is expected to prevail until at least the FOMC event on Wednesday.
On the latter, consensus among investors sees the Federal Reserve keeping its interest rate on hold, although the bank’s forward guidance is seen taking centre stage at Powell’s press conference.
In the US docket, Housing Starts and Building Permits will be in the limelight later in the NA session.
What to look for around USD
The index seems to have met some firm contention around the 105.00 region, as market participants get ready for the FOMC event on September 20.
In the meantime, support for the dollar keeps coming from the good health of the US economy, which at the same time appears underpinned by the tighter-for-longer stance narrative from the Federal Reserve.
Key events in the US this week: Building Permits, Housing Starts (Tuesday) – MBA Mortgage Applications, Fed interest rate decision, Fed Press Conference (Wednesday) - Initial Jobless Claims, Philly Fed Index, CB Leading Index, Existing Home Sales (Thursday) – Flash Manufacturing/Services PMIs (Friday).
Eminent issues on the back boiler: Persevering debate over a soft or hard landing for the US economy. Incipient speculation of rate cuts in early 2024. Geopolitical effervescence vs. Russia and China.
USD Index relevant levels
Now, the index is up 0.11% at 105.18 and faces the next up barrier at 105.43 (monthly high September 14) ahead of 105.88 (2023 high March 8) and finally 106.00 (round level). On the other hand, the breach of 104.42 (weekly low September 11) would open the door to 103.03 (200-day SMA) and then 102.93 (weekly low August 30).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.