US Dollar gains some ground as Asian currencies take a step back.
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- US Dollar gains some ground as Asian currencies take a step back.
- US debt-ceiling talks and geopolitical tensions triggered by Chinese ban on Micron lead the market action.
- US Dollar Index pairs back incurred losses from Monday.
The US Dollar (USD) is clawing its way back after a dismal session at the start of the week. The US Dollar Index (DXY) is showing signs of consolidation above a crucial support level, while tail risk is being priced in after US chip-manufacturer Micron got barred from China, with Japan and South-Korea eager to take over the business. A mild positive tone was the summary at the end of the first day of negotiations about the US debt ceiling this week, with a deal still possible.
On the macroeconomic data front, traders will be glued to their screens for the services numbers coming from the Purchase Managers Index (PMI) in the United States at 13:45 GMT. Add the Richmond Fed Manufacturing Index number for May briefly after that (14:00 GMT) and traders will have a good metric point in order to assess where to take the US Dollar next. On the other hand, a much lighter Fed speaker agenda on Tuesday with only Fed’s Logan giving welcome remarks at a conference on technology-enabled disruption.
The US Dollar Index (DXY) has taken out both the 55-day and the 100-day Simple Moving Averages (SMA), respectively, at 102.52 and 102.87 on the upside. Support held on Monday and is confirming continuation to the upside in order to challenge 103.61, the high of past Thursday.
On the upside, 105.76 (200-day SMA) still acts as the big target to hit, as the next upside target at 104.00 (psychological level, static level) acts as an intermediary element to cross the open space.
On the downside, 102.86 (100-day SMA) aligns as the first support level to make sure that . In the case that breaks down, watch how the DXY reacts at the 55-day SMA at 102.48 in order to assess any further downturn or upturn.
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