US Dollar losing the grip below 93.00

Pablo Piovano FXStreet

In terms of the US Dollar Index (DXY), the buck keeps losing momentum and is now breaking below the key support at the 93.00 handle.

US Dollar offered despite data

The optimism around the greenback following the White House announcement of its tax reform proposal has quickly fizzled out, prompting sellers to step in and drive USD lower.

In addition, comments by S.Mnuchin that the government is committed to get the tax legislation by year end also appear to have been insufficient to prop up the upside bias in DXY.

Furthermore, at her speech today, KC Fed E.George (2019 voter, hawkish) also deemed appropriated to have further gradual rate hikes, adding that the US economy will keep growing over the next years. Regarding the prospects of further tightening, CME Group’s FedWatch tool now sees the probability of a rate hike in December at just above 76%.

In the US data space, August’s trade deficit shrunk more than estimated, while the third revision of Q2 GDP now sees the economy expanding 3.1%, bettering consensus.

US Dollar relevant levels

As of writing the index is losing 0.31% at 92.98 facing the immediate support at 92.48 (10-day sma) seconded by 92.33 (21-day sma) and finally 91.53 (low Sep.20). On the upside, a break above 93.66 (high Sep.28) would open the door to 94.03 (23.6% Fibo of the 2017 drop) and finally 94.14 (high Aug.16).

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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