US Dollar Index struggles for direction around 100.00

• DXY looks for direction near the 100.00 mark on Wednesday.
• Concerns around the coronavirus crisis weigh on investors’ mood.
• Producer Prices, Powell’s testimony, EIA’s report on the docket.

The greenback, when tracked by the US Dollar Index (DXY), is trading without a clear direction near the 100.00 mark at the end of the Asian trading hours on Wednesday.

US Dollar Index focused on Powell, data

The index is alternating gains with losses and trades within a tight range on Wednesday, always around the 100.00 neighbourhood and with global sentiment mildly tilted towards the risk aversion.

In fact, mood among market participants soured on Tuesday on the back of rising scepticism regarding the gradual re-opening of the US economy, while poor inflation results in April and negative comments from Boeing’s CEO – who warned of the fragile health of the sector – have been also undermining the sentiment.

Later in the US data space, Producer Prices or the month of April are due seconded by the testimony by Chief J.Powell and the weekly report by the DoE on US crude oil inventories.

What to look for around USD

The greenback has given away part of the gains seen in the first half of the week, although it manages well to navigate around the 100.00 barrier and above while being propped up by renewed sentiment towards the safe haven universe. In the meantime, investors have now shifted the attention to the US-China trade war, while keep monitoring the gradual re-opening of the economy. Supporting the momentum around the greenback emerges the current “flight-to-safety” environment, helped by its status of “global reserve currency” and store of value. On another front, and following the FOMC event, the Fed is expected to stay on the loose end of the monetary policy stance, at least until the coronavirus crisis abates.

US Dollar Index relevant levels

At the moment, the index is losing 0.02% at 99.99 and faces the next support at 98.57 (weekly low May 4) followed by 98.41 (200-day SMA) and then 97.87 (61.8% Fibo of the 2017-2018 drop). On the other hand, a break above 100.44 (weekly high May 12) would open the door to 100.49 (78.6% Fibo of the 2017-2018 drop) and finally 100.93 (weekly/monthly high Apr.6).