• The index moves to tops in the 97.60/65 band.
  • Yields of the US 10-year note bounce off lows.
  • FOMC’s Brainard did not comment on monpol.

The greenback is now picking up extra pace and is moving to the upper end of the daily range near 97.60/70 when tracked by the US Dollar Index (DXY).

US Dollar Index looks to trade for direction

The index has managed to regain some composure on Wednesday and advance to the area of daily highs, although cautiousness among investors seems to have prevented the buck to extend the bullish attempt.

In fact, US-China trade jitters remain well and sound despite President Trump hinted at the likelihood that a trade deal could be closer in light of the imminent meeting between US and Chinese officials in Washington.

What to look for around USD

The centre of the debate for the greenback has shifted to the US-China trade dispute, although a high degree of uncertainty as well as scepticism among investors seem to prevail for the time being. On another direction, the lack of traction in US inflation – and concerns among Fed members – currently challenges the continuation of the recent up move in DXY. Dips in the buck, however, are seen shallow as overseas weakness, the safe haven appeal, favourable yield spreads vs. the Fed’s G10 peers and the status of global reserve currency keep the constructive bias on the buck unchanged.

US Dollar Index relevant levels

At the moment, the pair is losing 0.01% at 97.55 and a breach of 97.15 (low May 1) would aim for 97.03 (55-day SMA) and finally 96.75 (low Apr.12). On the other hand, the next hurdle aligns at 98.10 (high May 3) seconded by 98.32 (2019 high Apr.25) and then 99.89 (high May 11 2017).

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