The US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, is spending the last trading hour of the month consolidating its daily recovery gains in a tight range. As of writing, the DXY was at 95.43, up 0.12% on the day.
Today’s rebound seen in the index seems to be merely a technical correction as it struggled to sustain in the NA session despite some rather positive data. The fact that the Fed has been delivering a dovish message through FOMC members lately continue to keep the investors away from the USD. Furthermore, other major central banks, such as the ECB, the BoE, and the BoC, seem to be moving closer to making a tightening move, denting the overall demand for the US dollar.
“The greenback was headed for a quarterly loss of 3.2% and a monthly decline of 1.2%. Flows were modest as the dollar was jostled by the month-end rebalancing that defied expectations from several banks for further modest dollar selling ahead of the European close,” said Bloomberg in a recent report.
96 (psychological level) could be seen as the initial hurdle for the index ahead of 97.15 (Jun. 27 high) and 97.70 (May 30 high). On the downside, supports align at 95 (psychological level), 94.40 (Sept. 8, 2016, low) and 93.70 (Jun. 24, 2016, low).