US Dollar Index challenges lows near 95.60

• DXY alternates gains with losses, always in sub-96.00 levels.
• Risk appetite trends appears somewhat mixed on Tuesday.
• US Chicago Fed Activity Index climbed to 4.11 in June.

The greenback appears in the middle of the daily range near 96.80 when measured by the US Dollar Index (DXY) on Tuesday.

US Dollar Index looks to risk trends

The underlying bearish note remains well and sound around the greenback, motivating the index to shed ground for the third consecutive session and to shift the attention to the yearly lows in the 94.60 area.

The downside momentum in the buck picked up pace in late June along with the strong recovery in the sentiment surrounding the riskier assets, all in response to the gradual return to the economic normality in many countries and propped up lately by rising hopes of a potential coronavirus vaccine.

On the data space, the Chicago Fed Activity Index improved to 4.11 for the month of June. The API will publish its weekly report on US crude oil supplies later in the NA session.

What to look for around USD

The relentless advance of the COVID-19 pandemic in the US and across the world vs. news of a potential vaccine that could be developed before markets’ expectations plus the ongoing reopening of global economies are all driving the sentiment in the global markets and keep the dollar under pressure. On the constructive view of the dollar, bouts of risk aversion should support the investors’ preference for the greenback as a safe haven along with its status of global reserve currency and store of value. On another front, the speculative community kept adding to the offered note around the dollar for yet another week, opening the door to a potential development of a more serious bearish trend in the dollar.

US Dollar Index relevant levels

At the moment, the index is losing 0.10% at 95.72 and faces the next support at 95.62 (monthly low Jul.21) seconded by 94.65 (2020 low Mar.9) and then 94.20 (38.2% Fibo of the 2017-2018 drop). On the other hand, a break above 97.80 (weekly high Jun.30) would aim for 97.87 (61.8% Fibo of the 2017-2018 drop) and finally 98.17 (200-day SMA).