US Dollar Index meets support around 93.00, looks to trade, data

• DXY manages to rebound from the 93.00 region on Wednesday.
• US-China trade talks keep ruling the sentiment so far.
• US Mortgage Applications, Durable Goods Orders next on tap.

The US Dollar Index (DXY), which tracks the buck vs. a bundle of its main competitors, has regained the area above the 93.00 mark on Wednesday.

US Dollar Index looks to trade talks, risks trends

Choppy week for the greenback so far, although the index manages well to keep business above the 93.00 mark for the time being.

In the meantime, investors keep looking to the US political scenario, where the likeliness of another stimulus package seems to be losing traction by the day and is lending some extra support to the buck at the same time.

Furthermore, the dollar is reversing Tuesday’s pullback against the backdrop of rising optimism in the US-China trade front, all following recent talks between negotiators from both countries and with the progress on the Phase One deal – particularly the Chinese purchases of US products - in the centre of the debate.

Later in the session, weekly MBA’s Mortgage Applications are due along with July’s Durable Goods Orders and the usual EIA’s report on US crude oil stockpiles.

What to look for around USD

The index trades on a choppy fashion so far this week, managing to stabilize somewhat around the 93.00 neighbourhood. In the meantime,  and looking at the broader picture, investors remain bearish on the dollar against the usual backdrop of a dovish Fed, the unremitting progress of the coronavirus pandemic, political uncertainty and the massive stimulus package, whereas occasional bouts of US-China tensions could lend some temporary legs to the greenback. Supporting the negative stance on the dollar, the speculative community remained clearly biased towards the bearish side during the past week.

US Dollar Index relevant levels

At the moment, the index is up 0.14% at 93.14 and a break above 93.47 (weekly high Aug.21) would aim for 93.99 (monthly high Aug.3) and finally 94.20 (38.2% Fibo of the 2017-2018 drop). On the downside, the next support lines up at 92.13 (2020 low Aug.18) seconded by 91.92 (23.6% Fibo of the 2017-2018 drop) and then 91.80 (monthly low May 2018).