US Dollar flirting with highs above 97.30, FOMC eyed

Pablo Piovano FXStreet

The greenback, when tracked by the US Dollar Index, stays on a positive note so far, challenging the area of daily highs in the 99.30/35 band.

US Dollar attention to FOMC

After another test of multi-month lows in the 96.70 region on Tuesday, the index managed to regain buying interest and is now clinching its second consecutive session with gains ahead of the FOMC minutes due later in the European evening.

Consensus expects the Committee to lean towards the hawkish side today, highlighting the solid health of the US labour market and signalling that further tightening by the Fed remains on the table.

Additionally, market participants will look for any hints on the future steps of the Fed’s reinvesting policy.

Despite US political jitters stay far from abated, the buck seems to be deriving support from renewed bets on a move by the Fed at the June meeting, with the probability of such scenario currently at just above 83%, according to CME Group’s FedWatch tool.

Other than the FOMC minutes, Existing Home Sales and the weekly report on crude oil supplies by the EIA are also due in the US calendar.

US Dollar relevant levels

The index is up 0.03% at 97.30 and a breakout of 97.32 (high May 24) would open the door to 97.97 (high May 18) and finally 98.45 (20-day sma). On the other hand, the next support lines up at 96.70 (2017 low May 23) followed by 95.91 (low Nov.9 2016) and then 94.95 (low Sep.22 2016).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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