US Dollar flirting with tops above 98.60

The US Dollar Index – which tracks the buck vs. its main rivals – keeps recovering part of the ground lost on Friday and is currently testing daily highs above 98.60.

US Dollar boosted by data, sentiment

The greenback has recovered the smile at the beginning of the week, as market participants continue to adjust to the recent auspicious results from the advanced GDP figures for the third quarter published on Friday.

In fact, according to Atlanta Fed’s GDPNow tool, the forecast for the Q4 GDP signals a 2.7% growth.

The persistent buying interest around USD has intensified in early morning following news that the FBI could extend its investigation over the case involving emails and Democrat presidential candidate H.Clinton, sparking some risk-aversion sentiment.

Data wise in the US docket today, Personal Spending has surprised markets in September rising 0.5% MoM, while Personal Income has come in below estimates. Further data saw inflation figures tracked by the PCE rising 1.5% on a year to September and the Dallas Fed index improving to -1.5 for the current month.

Adding extra support to USD, speculative net longs continued to build up during the week ended on October 25, reaching levels last seen in August 2015 above 54K contracts, according to the latest CFTC report.

In the meantime, rising expectations of a rate hike by the Fed in December keep sustaining the upside momentum around USD. On the daily chart, the index keeps its bullish stance intact as long as the 6-month support line underpins, currently around 95.60.

US Dollar relevant levels

The index is gaining 0.28% at 98.62 facing the next resistance at 99.09 (high Oct.25) followed by 99.95 (high Jan.21) and then 100.60 (high Dec.3). On the other hand, a break below 98.22 (low Oct.28) would aim for 97.81 (20-day sma) and finally 95.85 (200-day sma).