US Dollar Index stays cautious above 100.00, looks to data

• DXY keeps business above the 100.00 mark on Thursday.
• US economy still expected to re-open on a gradual fashion.
• US Initial Claims will grab all the attention in the US calendar.

The greenback is navigating on a cautious note in the second half of the week, managing to keep the trade above the 100.00 mark when tracked by the US Dollar Index (DXY).

US Dollar Index focused on data

The index is looking to add to the ongoing recovery on Thursday, managing well to remain above the 100.00 mark ahead of the opening bell in the Old Continent.

In the meantime, the US-China trade effervescence has returned to the fore in past sessions, while the timing and shape of the re-opening of the US economy also remains in the centre of the debate.

On the data front, market participants wait for another weekly release of the key Initial Claims in order to gauge the deterioration of the US labour market, which already saw more than 25 million citizens file for unemployment benefits.

Additional data include Challenger Job Cuts, advanced figures for Non-farm Productivity and Unit Labor Costs, Consumer Credit Change and the speech by Philly Fed P.Harker (voter, hawkish).

What to look for around USD

The better note in the greenback pushed the index back above the 100.00 mark earlier in the week, prolonging the weekly recovery from Monday’s lows. In the meantime, investors have now shifted the attention to the US-China trade war, while the country keeps planning the gradual re-opening of the economy. Supporting the momentum around the greenback emerges the current “flight-to-safety” environment, helped by its status of “global reserve currency” and store of value. On another front, and following the FOMC event, the Fed is expected to stay on the loose end of the monetary policy stance, at least until the coronavirus crisis abates.

US Dollar Index relevant levels

At the moment, the index is gaining 0.02% at 100.19 and a break above 100.23 (weekly high May 7) would open the door to 100.49 (78.6% Fibo of the 2017-2018 drop) and finally 100.93 (weekly/monthly high Apr.6). On the downside, the next support is located at 98.57 (weekly low May 4) followed by 98.37 (200-day SMA) and then 97.87 (61.8% Fibo of the 2017-2018 drop).