US Dollar advances further, 96.50 on sight

The US Dollar Index, which tracks the greenback vs. its main rivals, is extending its rally to the area of 96.30/40, or fresh multi-day tops.

US Dollar challenging September tops

The index is advancing further north of the 96.00 barrier on Tuesday, approaching the critical resistance area around 96.30/50, where are located August/September peaks and a retracement of the July-August drop.

USD has picked up extra pace as expectations of a rate hike by the Fed are on the rise, with CME Group’s FedWatch tool currently pointing to just above 55% probability of higher rates at the December meeting.

Data wise in the US calendar, IBD/TIPP’s Economic Optimism has surpassed estimates at 49.6 for the current month vs. 47.5 forecasted and up from September’s 46.7. Later in the NA session, the weekly report on US crude stockpiles by the API is due.

USD continues to derive support as the sentiment around the risk-associated space continues to deteriorate in response to heightened concerns over Brexit consequences for the UK economy, JPY-selling and potential risks in the EU banking system, with the Deutsche Bank and Monte Dei Paschi Di Siena in the centre of the debate.

US Dollar relevant levels

The index is gaining 0.66% at 96.33 and a break above 96.50 (high Aug.5) would open the door for 97.62 (high Jul.25) and then 98.59 (high Mar.3). On the flip side, the immediate support lines up at 94.97 (support line off 2016 low) ahead of 94.44 (low Sep.8) and finally 94.05 (low Aug.18).