US Dollar Index extends the bounce and approaches 97.00

• DXY comes up after bottoming out near 96.50 in early trade.
• The risk-on sentiment remains subdued and lifts the dollar.
• NFIB index, Wholesale Inventories, API’s report next on the docket.

The US Dollar Index (DXY), which gauges the greenback vs. a basket of its main competitors, has met support near 96.50 and is now looking to retest the 97.00 mark on turnaround Tuesday.

US Dollar Index focused on data, re-opening of economy

The index is navigating the area of daily highs just below 97.00 the figure against the backdrop of renewed selling pressure in the risk-associated complex.

In fact, after bottoming out in the 96.50 region earlier in the Asian session, the dollar has managed to regain some composure in the wake of the opening bell in Euroland and as market participants continue to cash out recent gains in the risk complex.

In the meantime, investors’ attention remains well on the progress of the re-opening of the economy, relegating somewhat concerns over the coronavirus pandemic and usual US-China trade.

In the US data space, the NFIB index is coming up next seconded by Wholesale Inventories, the IBD/TIPP index, JOLTs Job Openings and the weekly report on US crude oil supplies by the American Petroleum Institute (API).

What to look for around USD

The greenback struggles for direction at the beginning of the week, although it has managed to reclaim some ground lost after bottoming out in the mid-96.00s. As usual in last sessions, price action around the dollar is expected to keep tracking the performance of the broad risk appetite trends, US-China trade developments and the progress on the re-opening of the economy. On the constructive stance around the buck, bouts of risk aversion should support the investors’ preference for the greenback as a safe haven along with its status of global reserve currency and store of value.

US Dollar Index relevant levels

At the moment, the index is gaining 0.23% at 96.90 and a breakout of 97.87 (61.8% Fibo of the 2017-2018 drop) would aim for 98.45 (200-day SMA) and finally 99.01 (100-day SMA). On the downside, immediate contention emerges at 96.44 (monthly low Jun.5) followed by 96.33 (monthly low Dec.31 2019) and then 96.03 (50% Fibo of the 2017-2018) drop.