US Dollar Outlook – Pick Up The Bid As Hopes of A Stimulus Deal Fade

US Dollar News, Analysis, and Price

  • US dollar (DXY) is reinforced by risk-averse flows.
  • US election countdown begins.
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During this week, the USA dollar picked up a smaller risk-reverse bid, pushing it even higher. Also, the USD basket picked up a smaller enhancement from a slightly weaker Euro though it was not able to bounce back above 94.00. With that being said, the greenback is expected to maintain the risk-off bid as presidential elections in the USA is approaching on Nov 3rd and the polls intensely siding with Joe Biden (Democratic party candidate) with only 3 weeks remaining. Donald is suspected to bring up a fight, which might leave the dollar weaker to pockets of instability before the vote.

The economic calendar of the USA is moderately undistinguished in the coming week until the release of flash market PMIs late in the week. This is because market-moving economic proceedings as well as data releases depend on the Forexdailyreport Economic calendar. Investors are likely to talk about the partial US stimulus bill discussions that appear gridlocked before the elections. In the meantime, a series of targeted, smaller, stimulus packages are being proposed in efforts to assist reinforce the economy stirred by the pandemic.

US Dollar Basket Daily Price Chart

US Dollar

Earnings in the US are busy coming week with market bulls Gamble and Procter (October 19), Intel Corp (October 22), Tesla (October 21), and Netflix (October 20). This will be very crucial among other firms reporting.

The daily chart for the USA dollar demonstrates DXY index breaking out around 93.00. It will focus mainly on the beginning and end of this week as well as how support will hold in the near-term. The US dollar also moved above 50-day (simple moving average) though it is having issues breaking the short-dated 20 SMA. There is a mass of current highs that moves back to the multi-high of 94.79 that occurred on Sep 25. On the other hand, volatility is still low for the DXY index dollar basket applying the ATR though it is expected to change ahead of the elections.

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