US Dollar Index Gives Up Support and Takes Aim at September Lows
The US Dollar continues to move lower with the DXY index giving up the 93.00 level and looking to target the September 1st lows around 92.00.
The rally in the greenback started in September after a second stimulus package from the U.S. seemed a lost cause. The revival of those talks has seen the dollar on the back foot since September 25th and if the index tests those lows at 92.00 it will be a significant level for the future path of commodities and global currencies.
The European Central Bank has recently noted its concern over the euro’s price gains in recent months and officials have even talked of some kind of intervention if it goes too high. The advance in the single currency is adding to the deflationary issues in the country and further losses in the dollar will not be welcome in Brussels. Other currencies around the globe would also feel the pressure with the likes of China seeing lower prices for exports.
Today is an important one on the economic calendar with services and manufacturing PMIs coming out of Germany, the Eurozone, and the United States economy. This will be the near-term driver, but traders will be keeping an eye on headlines regarding the second stimulus package, which is said to be around $1.88 trillion.
Dollar Index Technical Outlook
The US Dollar index broke lower from the test of 93.00 and the index retested the uptrend support line from mid-September. A bearish close today will likely see the price head lower with the 92.00 support level being the key target. A stop can be placed above the high of today if we close lower. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.