US Dollar Index remains weak around 95.00 ahead of FOMC
- The index trades on the defensive and hovers over the 95.00 handle.
- Yields of the US 10-year note drop and rebound from 2.81%.
- US Existing Home Sales came in below expectations at 5.34 M.
The greenback, in terms of the US Dollar Index (DXY), remains entrenched into the negative territory although it managed to bounce off earlier lows in sub-95.00 levels.
US Dollar now looks to FOMC
The index is prolonging the weekly decline to test new multi-day lows in the 95.00/94.90 region, this time sponsored by a re-emergence of US political jitters following recent declarations by P.Manafort and M.Cohen.
In addition, the sentiment around the riskier assets continue to improve, forcing the buck to shed further ground and exposing a more sustainable drop to the critical short term support line in the 94.70 region.
In the data space, Existing Home Sales came in below estimates at 5.34 million units in July, or contracting 0.7% on a monthly basis.
Later in the NA session, the greenback is expected to remain in centre stage in light of the publication of the FOMC minutes, where potential extra tightening by the Fed (four rate hikes instead of the original three for this year) should grab all the attention.
US Dollar relevant levels
As of writing the index is down 0.11% at 95.15 facing the next support at 94.93 (low Aug.21) seconded by 94.89 (55-day SMA) and finally 94.08 (low Jul.26). On the other hand, a break above 95.43 (21-day SMA) would aim for 96.08 (10-day SMA) and then 96.98 (2018 high Aug.15).
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.
