The USD Index is set to net its biggest daily gain in seven as the flight to safety takes hold of the markets on the back of the spread of the Delta variant of the coronavirus.
Risk aversion appears to have imposed itself in Tuesday’s trading, as risky commodities took a back seat and the safe-haven US Dollar gained across the board. Much of the upside seen in the US Dollar index resulted from the Fed’s hawkish tilt in its 16 June rate statement. However, the Fed’s board members have backtracked, shifting the focus away from the Fed and back to the pandemic.
Also helping the USD Index to the 0.26% gain on the day as of writing is the upbeat CB Consumer Confidence Index number, which rose from 120.0 in May to 127.3 in June. This figure beat estimates of 118.9.
Technical Outlook for USD Index
The active daily candle is testing the resistance at the 92.00 psychological mark. If this barrier is broken, the 92.32 price mark becomes the next available upside barrier. A further advance takes the DXY towards 92.50, with 92.80 and 93.17 serving as additional targets to the north.
On the flip side, a rejection at 92.00 leads to a retest of the 91.50 support level, with additional downside targets found at 91.26 and 90.96.