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US Dollar Index approaches 95.70, session tops

  • The index picks up extra pace and tests the 95.70 area.
  • Yields of the US-10 year note ease from 2.72%.
  • US Producer Prices, NY Empire State index next of relevance.

The greenback is reverting the negative start of the week and is now re-testing the so far weekly peaks in the 95.70 region when tracked by the US Dollar Index (DXY).

US Dollar Index looks to data, Brexit

The index seems to have resumed the recent recovery from last week’s YTD lows in the 95.00 neighbourhood and is re-visiting the proximity of 95.70, a so far strong resistance.

On the US calendar today, December’s Producer Prices will be the salient event seconded by the regional manufacturing gauge by the NY Empire State index. However, the greenback is expected to remain under pressure in light of the speech by ECB’s M.Draghi and the crucial vote in the UK’s House of Commons on PM May’s Brexit plan.

What to look for around USD

Despite the ongoing rebound, the index is expected to remain under pressure via the broader risk-appetite trends and optimism over the likeliness of a trade deal between the US and China. Furthermore, the renewed ‘flexible and patient’ stance from the Federal Reserve (as per latest FOMC minutes and dovish Fedspeak), the probable re-assessment of the rate path in the next months and the pace of the economic growth should keep the buck under some pressure and could remove tailwinds from a serious bull run.

US Dollar Index relevant levels

At the moment, the pair is gaining 0.10% at 95.69 and a breakout of 95.83 (10-day SMA) would open the door to 96.23 (21-day SMA) and then 96.96 (2019 high Jan.2). On the downside, the next support is located at 95.03 (2019 low Jan.10) seconded by 94.94 (200-day SMA) and finally 94.79 (low Oct.16 2018).

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