US Dollar makes a U-turn at 95, looks to close the day flat
|- U.S. Economic Optimism Index improves in August.
- 10-year T-bond yield gains more than 1% on the day.
The US Dollar Index, which tracks the greenback against a basket of six major currencies, touched a daily low at 95 in the early NA session but reversed its course after the macroeconomic data releases from the United States surpassed the market expectations. As of writing, the index was at 95.28, down only 0.08% on the day.
The Economic Optimism Index published by the IBD/TIPP improved to its best level since late 2016 at 58 in August from 56.4 in July. "The Financial Related Stress Index reflected a reading of 47.4, down 8.1 percent to reflect an all-time low (a higher stress index reading indicates more stress)," the publication read. Furthermore, the U.S. Bureau of Labor Statistics reported that the number of job openings rose to 6.662 million in June compared to analysts' estimate of 6.646 million.
In addition to the upbeat data, rising T-bond yields helped the index stretch higher on Tuesday. Following Monday's fall, the yield on the 10-year T-bond rose more than 1% on Tuesday and was last seen at 2.975%, up 1.25% on the day.
Later in the session, the Federal Reserve is going to publish the consumer credit figures. Markets see the total amount of credits to ease to $15.25 billion in June from $24.56 billion. A higher-than-expected reading could help the DXY extend higher and recover all of its daily losses.
Technical outlook
The index could encounter the first resistance at 95.50 (Aug. 6 high) ahead of 96 (psychological level) and 96.50 (Jul. 5, 2017, low). On the downside, supports are located 95 (psychological level/daily low), 94.50 (50-DMA) and 94.10 (Jul. 26 low).
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