USD Index resumes the upside and rebounds to 106.40 ahead of data
|- The index leaves behind two consecutive daily pullbacks.
- The Fed is seen leaving rates unchanged at its event on November 1.
- CB Consumer Confidence takes centre stage later in the NA session.
The greenback, in terms of the USD Index (DXY), regains some upside impulse and advances to the 106.40 zone ahead of the opening bell in Euroland on Tuesday.
USD Index focuses on data, Fed
The index leaves behind two daily pullbacks in a row and revisits the 106.40 area on the back of the knee-jerk in the risk-associated complex on turnaround Tuesday.
The current recovery in the index comes in tandem with a small decline in US yields across the curve amidst steady speculation that the Federal Reserve might keep its interest rates unchanged at its meeting on Wednesday.
Later in the NA session, the Employment Cost index is due in the first turn seconded by the FHFA House Price Index and the always relevant Consumer Confidence gauged by the Conference Board.
What to look for around USD
The recent corrective move in the index appears to have met decent contention just above the 106.00 yardstick so far this week.
In the meantime, support for the dollar keeps coming from the good health of the US economy and still elevated inflation, which morphs into higher yields and underpins the renewed tighter-for-longer narrative from the Federal Reserve.
Key events in the US this week: Employment Cost, FHFA House Price Index, CB Consumer Confidence (Tuesday) – MBA Mortgage Applications, ADP Report, Final Manufacturing PMI, ISM Manufacturing, Construction Spending, FOMC Interest Rate Decision, Powell press conference (Wednesday) - Initial Jobless Claims, Factory Orders (Thursday) – Nonfarm Payrolls, Unemployment Rate, Services PMI, ISM Services PMI (Friday).
Eminent issues on the back boiler: Persistent debate over a soft or hard landing for the US economy. Speculation of rate cuts in late 2024. Geopolitical effervescence vs. Russia and China. Potential spread of the Middle East crisis to other regions.
USD Index relevant levels
Now, the index is up 0.20% at 106.35 and the breakout of 106.88 (weekly high October 26) could expose 107.34 (2023 high October 3) and finally 107.99 (weekly high November 21 2022). On the downside, initial contention aligns at 105.36 (monthly low October 24) ahead of 104.42 (weekly low September 11) and then 103.43 (200-day SMA).
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.