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US Dollar clings to gains around 95.00

  • DXY looks to gain traction above 95.00.
  • Next interim resistance at 95.15 (October’s high).
  • US yields keep driving sentiment.

Measured by the US Dollar Index (DXY), the buck is picking up some pace at the beginning of the week around the key up barrier at 95.00 the figure.

US Dollar following US yields

DXY so far managed to leave behind the initial soft note, although it is meandering within a narrow range amidst the generalized thin trading conditions.

The greenback, as usual, is tracking the performance of yields in the key US 10-year reference, which are now extending the bounce off lows in sub-2.32% levels to the current 2.33% neighbourhood.

On the broader scenario, USD keeps deriving support from the prospects of further tightening by the Fed by year-end, while headlines from the US political arena (Trump’s tax reform and the Russia-gate) remain poised to drive investors’ mood in the very near term.

Regarding the likelihood of higher rates likely to be announced at the December 13 meeting, CME Group’s FedWatch tool is currently placing the probability of such an event at around 97%, based on Fed Funds futures prices.

Further news around the buck noted speculators trimmed their net short positions to the lowest level since July 25 during the week ended on October 31, according to the latest CFTC report.

US Dollar relevant levels

As of writing the index is gaining 0.06% at 94.98 and a breakout of 95.15 (high Oct.27) would open the door to 95.90 (38.2% Fibo of the 2017 drop) and then 96.73 (200-day sma). On the downside, the immediate support aligns at 94.55 (10-day sma) seconded by 94.42 (low Nov.2) and finally 94.03 (23.6% Fibo of the 2017 drop).

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