The greenback, in terms of the US Dollar Index, is now intensifying its upside, moving closer to the 100.60 area, or daily tops.
US Dollar bid above 100.00
The index continues to bounce off weekly lows in sub-100.00 levels traded in the wake of the Italian referendum on Monday, already retaking the mid-100.00s as the buying interest around USD seems to be gradually turning up.
Recent auspicious results from the US docket have added to the solid recovery of the US economy and to the prospects of the stronger dollar in the periods ahead.
Supporting this view, further tightening by the Federal Reserve later in the month is almost priced in by market participants while prospects of higher inflation expectations backed by a probable looser fiscal policy under Trump’s presidency remain a key driver for the dollar’s upside potential.
Furthermore, speculators remain bullish on USD, as net longs have climbed to the highest level since November 1 during the week ended on November 29, as seen in the latest CFTC report.
Looking ahead, Mortgage Applications and JOLTs Job Openings are only due followed by the EIA’s weekly report on crude inventories.
US Dollar relevant levels
The index is gaining 0.05% at 100.56 and a break above 100.76 (20-day sma) would open the door to 101.88 (high Nov.30) and then 102.12 (2016 high Nov.24). On the flip side, the immediate support is located at 99.87 (low Dec.5) followed by 99.70 (23.6% Fibo of May-November up move) and finally 99.38 (low Nov.14).
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