US Dollar Index moves to 3-week tops near 96.40

The index pushes higher and tests peaks around 96.40.
US markets remain closed due to MLK holiday.
IMF revised lower its forecast for global growth to 3.5%.

Pablo Piovano FXStreet

Tracked by the US Dollar Index (DXY), the greenback is gaining some momentum and clinches fresh multi-week highs beyond 96.40.

US Dollar Index bid on low volatility

The index managed to gather some extra steam and clinch fresh 3-week tops above 96.40, although current thin market conditions due to the US holiday could probably be exaggerating some moves, especially without a clear catalyst.

In the meantime, the buck is prolonging the multi-session up move and deriving some support from the ongoing uncertainty around the Brexit negotiations and (rising?) investors’ wariness over the slowdown in China and the euro area.

What to look for around USD

The US shutdown is entering its fourth consecutive week and with it some concerns started to emerge regarding its impact on future GDP and employment figures. In the meantime, there is no fresh news from the US-China front, with Chinese officials expected to resume the trade talks on January 30-31 in Washington. On the longer run, investors continue to scrutinize the probable revision of the Fed’s rate path this year, always considering the prospects of a slowdown in domestic fundamentals and the reinforced ‘data-dependency’ from the Federal Reserve.

US Dollar Index relevant levels

At the moment, the pair is gaining 0.02% at 96.38 facing the next resistance at 96.43 (high Jan.18) seconded by 96.60 (55-day SMA) and finally 96.96 (2019 high Jan.2). On the flip side, a breakdown of 96.07 (100-day SMA) would open the door to 95.86 (10-day SMA) and then 95.76 (50% Fibo of the September-December up move).

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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