US Dollar Index looks firm, approaching 96.00
- The index remains optimistic at the beginning of the week.
- Yields of the US 10-year note stay near weekly tops around 2.72%.
- US ISM Non-manufacturing, Services PMI next of relevance today.
The greenback, in terms of the US Dollar Index (DXY), is up for yet another session and is now approaching the critical barrier at 96.00 the figure.
US Dollar Index focused on data
DXY is advancing for the fourth session in a row on Tuesday, as the demand for the buck remains well underpinned by recent positive publications in the US calendar.
It is worth recalling that Payrolls figures surprised to the upside, showing the solidness in the labour market stays unchanged, while the key ISM manufacturing rebounded in January from the (temporary?) drop in the previous month.
The continuation of the recovery in DXY has been in tandem with a strong rebound in yields of the key US 10-year note, which managed to retake the 2.72% and above, recording at the same time new multi-day peaks.
There is now news from yesterday’s meeting between President Trump and Chief J.Powell, as it was an ‘informal dinner’ to discuss the outlook on the economy and recent developments.
Later in the NA session, the Services PMI is due seconded by the more relevant ISM Non-manufacturing, IBD/TIPP index and the weekly report on US crude oil supplies by the American Petroleum Institute (API).
What to look for around USD
The greenback appears to have left behind the recent dovish message from the FOMC at its last meeting. However, investors are expected to remain vigilant on the new neutral stance from the Federal Reserve, as well as any indication of the timing of the balance sheet run-off. In addition, President Trump and China’s Xi Jinping will meet again later in the month amidst the recent improvement in the sentiment surrounding these negotiations.
US Dollar Index relevant levels
At the moment, the pair is up 0.11% at 95.94 and a breakout of 96.17 (100-day SMA) would open the door to 96.22 (38.2% Fibo of the September-December up move) and finally 96.43 (55-day SMA). On the downside, immediate contention emerges at 95.35 (200-day SMA) followed by 95.16 (low Jan.31) and then 95.03 (2019 low Jan.10).