USD Index treads water around 106.00 ahead of data

• The index navigates the lower end of the range near 106.00.
• US yields look steady around Wednesday’s close across the curve.
• Weekly Claims, Philly Fed Index next on tap in the US docket.

The USD Index (DXY), which gauges the greenback vs. a bundle of its main competitors, alternates gains with losses just above the 106.00 region on Thursday.

USD Index focuses on upcoming data

The index continues to struggle to leave behind the recent weakness and gyrates around the low-106.00s against the backdrop of a mild bias towards the risk-associated universe.

The offered stance in the buck so far comes pari passu with the lack of traction in US yields across the curve, at a time when investors seem to have practically digested the likeliness of a discussion of a pivot at the next Fed event on December 14.

In the US data space, usual Initial Claims are due seconded by the Philly Fed Manufacturing Index, Building Permits and Housing Starts. In addition, FOMC’s M.Bowman (permanent voter, centrist) and P.Jefferson (permanent voter, centrist) are also due to speak.

What to look for around USD

Price action around the dollar remains depressed and relegates the index to navigate in the area of multi-month lows near the 106.00 zone.

In the meantime, the greenback is expected to remain under the microscope amidst persistent investors’ repricing of a probable slower pace of the Fed’s rate path in the upcoming months.

Key events in the US this week: Building Permits, Initial Jobless Claims, Housing Starts, Philly Fed Index (Thursday) - CB Leading Index, Existing Home Sales (Friday).

Eminent issues on the back boiler: US midterm elections. Hard/soft/softish? landing of the US economy. Prospects for further rate hikes by the Federal Reserve vs. speculation of a recession in the next months. Fed’s pivot. Geopolitical effervescence vs. Russia and China. US-China persistent trade conflict.

USD Index relevant levels

Now, the index is retreating 0.04% at 106.24 and the breakdown of 105.34 (monthly low November 15) would open the door to 105.00 (200-day SMA) and finally 104.63 (monthly low August 10). On the other hand, the next up barrier aligns at 109.13 (100-day SMA) seconded by 110.81 (55-day SMA) and then 113.14 (monthly high November 3).