US Dollar Index struggles for direction around 92.70

• Upside in DXY appears capped around the 93.00 zone.
• Democrat win, Pfizer's vaccine keep the dollar under pressure.
• MBA’s Mortgage Applications only due in the US data space.

The greenback alternates gains with losses around the 92.70 region when tracked by the US Dollar Index (DXY) on Wednesday.

US Dollar Index stays capped by 93.00

The index now moves within a rangebound theme following Monday’s sharp advance, although the 93.00 neighbourhood has emerged as a tough nut to crack for USD-bulls for the time being.

In the meantime, the dollar remains under scrutiny as global market participants continue to adjust to the prospects of a Biden presidency as well as the idea that a vaccine against the coronavirus is expected to be out in the (very?) short-term horizon, supporting at the same time the view of a strong (and faster) recovery post-pandemic.

In the US docket, Mortgage Applications by MBA will be the sole release on Wednesday, as activity in the US markets will be reduced due to the Veteran’s Day (Federal) holiday.

What to look for around USD

DXY’s recovery appears so far capped by the 93.00 area. In the meantime, the dollar remains focused on the US post-elections scenario, where all the looks are upon (still) President Trump and his potential attempts to contest some results in several states. On the more macro view, the impact of the second wave of the pandemic on the global economy could favour the occasional re-emergence of the risk aversion and therefore lend some support to the buck, while extra progress regarding vaccines against the COVID-19 should support momentum in the risk complex. Further out, the “lower for longer” stance from the Federal Reserve is expected to keep limiting potential serious upside in DXY.

US Dollar Index relevant levels

At the moment, the index is losing 0.02% at 92.69 and faces immediate contention at 92.13 (monthly low Nov.9) followed by 91.92 (23.6% Fibo of the 2017-2018 drop) and then 91.80 (monthly low May 2018). On the other hand, a breakout of 92.97 (monthly high Nov.10) would open the door to 93.29 (55-day SMA) and finally 94.30 (monthly high Nov.4).