US Dollar Index looks to extend the rally beyond 93.00

• DXY posts modest gains above 93.00 on Tuesday.
• US markets return to the normal activity following Monday’s holiday.
• NFIB Index, IBD/TIPP Index next of note in the US docket.

The greenback, when gauged by the US Dollar Index (DXY), is extending the upside momentum beyond the 93.00 mark on Tuesday.

US Dollar Index looks to data, risk trends

The index is advancing for the sixth consecutive session and is looking to extend the recovery further north of the 93.00 yardstick on turnaround Tuesday. It is worth recalling that the dollar regained traction after bottoming out in the 91.70 region at the beginning of the month.

In fact, strong gains in the risk-associated universe recorded in past weeks have been lending renewed support to the buck since the start of the month, although a clear breakout of the 93.00 levels looks somewhat elusive for the time being.

Later in the session, the US calendar will show the NFIB Index and the IBD/TIPP Economic Optimism Index. Moving forward, inflation figures tracked by the CPI and weekly Claims will take centre stage later in the week.

What to look for around USD

The index remains on a positive note and extending the upside momentum into this week following the latest release of the Non-farm Payrolls (Friday) and with gains so far testing the 93.00 area. Despite the ongoing recovery, and looking at the broader picture, investors keep the bearish view on the dollar unchanged against the backdrop of a (more) dovish Fed, the unremitting progress of the coronavirus pandemic and political uncertainty ahead of the November elections. On the supportive side of the buck emerge occasional bouts of US-China tensions.

US Dollar Index relevant levels

At the moment, the index is losing 0.03% at 93.03 and faces the next contention at 91.75 (2020 low Sep.1) seconded by 89.23 (monthly low April 2018) and then 88.94 (monthly low March 2018). On the other hand, a break above 93.24 (weekly high Sep.4) would open the door to 93.47 (weekly high Aug.21) and finally 93.99 (monthly high Aug.3).