US Dollar approaches 94.00 ahead of FOMC

  • The index trades in weekly peaks near the 94.00 handle.
  • US 10-year yields drop to lows in the 2.96% neighbourhood.
  • US Producer Prices next on tap ahead of FOMC meeting.

The greenback, measured by the US Dollar Index (DXY), is trading on the positive footing on Wednesday and targets the critical 94.00 milestone.

US Dollar looks to data, FOMC

The index is prolonging the upbeat momentum so far this week, eyeing a test of the critical barrier at 94.00 the figure amidst a renewed sentiment towards the greenback.

The ongoing uptick has been on the back of choppy activity in yields of the key US 10-year reference, which are coming down to test the 2.96% level after advancing to weekly highs around 2.98% earlier in the week.

Later in the NA session, Producer Prices for the month of May are due ahead of the key FOMC meeting, where market participants have already anticipated a 25 bp rate hike. Additionally, the updated version of the ‘dots-plot’ will also be in centre stage.

US Dollar relevant levels

As of writing the index is up 0.05% at 93.88 facing the next up barrier at 94.00 (psychological level) followed by 94.32 (high Jun.4) and finally 94.45 (high May 31). On the other hand, a breakdown of 93.22 (low Jun.7) would aim for 92.80 (38.2% Fibo of the April-June up move) and then 92.24 (low May 13).

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