- DXY failed to break above 94.00 on Monday
- USTs keep driving the mood around the buck
- President Trump should name Yellen’s successor soon
Measured by the US Dollar Index (DXY), the greenback is struggling for direction on Tuesday and keeps gravitating around the 93.80 region following the opening bell in the Old Continent.
US Dollar focused on Trump’s decision
After two consecutive sessions with gains, the greenback’s upside seems to have met a tough barrier in the 94.00 neighbourhood. It is worth noting that this resistance area is also reinforced by a Fibo retracement of the 2017 drop located at 94.03.
The healthy recovery in the index has been in tandem with a strong rebound in yields of the US 10-year reference, although the 2.40% level has so far proven to be quite a significant hurdle.
In the meantime, USD stays focused on the upcoming decision by President Trump on the next Fed Chief, with (hawkish) candidate J.Taylor still being the front-runner ahead of FOMC’s (dovish) J.Powell and former FOMC Governor K.Warsh (centrist/hawkish).
In the US data space, Markit’s advanced manufacturing/services PMIs will be the only releases of note seconded by the Richmond manufacturing index and the weekly report on US crude oil supplies by the American Petroleum Institute (API).
US Dollar relevant levels
As of writing the index is down 0.01% at 93.84 and a break below 93.41 (21-day sma) would aim for 93.06 (low Oct.19) and then 92.75 (low Oct.13). On the other hand, the next hurdle aligns at 94.03 (23.96% Fibo of the 2017 drop) followed by 94.10 (100-day sma) and finally 94.27 (high Oct.6).
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