US dollar index rises again but remains below 99.00

Matías Salord FXStreet

Greenback recovered ground across the board during the American session and pushed the US dollar index to test daily highs. It is about to end higher but the rally appears to be losing strength, still no signs of a bearish correction.

Short-lived correction

On Asian hours, the DXY, that gauges the US dollar against its main competitors, reached 98.77, the highest level since February and then pulled back. After finding support at 98.50 rose back toward daily highs.

It was about to end the day hovering around 98.70, marginally higher for the day. The index continues to receive support from expectations of a rate hike from the Federal Reserve before the end of the year. Today the US Manufacturing PMI (preliminary) showed a rise from 51.5 to 53.2 while Fed’s Bullard and Evans comments left the doors open to a rate hike.

Tomorrow there will be data on house prices (S&P / Case-Shiller) and consumer confidence while the key report of the week will be on Friday with the first reading of third quarter GDP.

Technical levels

To the upside, resistance levels could be seen at 98.77/80 (daily high) followed by the 99.00 handle (psychological). On the downside, support might lie at 98.50 (daily low), 98.25 (Oct 21 low) and 98.10 (Oct 13, 14 & 17 high).

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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