US Dollar testing lows near 97.30

Pablo Piovano FXStreet

The US Dollar Index (DXY), which tracks the buck vs. a basket of its main rivals, is surrendering part of the weekly gains and is now returning to the 97.30/25 band.

US Dollar offered on risk-on pick up

The index is now losing momentum after two consecutive daily advances amidst some improvement in the sentiment surrounding the risk-associated universe, particularly after the sell off in crude oil prices are showing some signs of respite today.

In the meantime, USD keeps the positive tone so far this week, managing to trade above the 97.00 handle and supported as of late by positive comments from some FOMC governors.

Recall that NY Fed W.Dudley (permanent voter) emphasized on Monday the good shape of the US economy and argued against slowing the pace of tightening by the Fed. In the same line, Boston Fed E.Rosengren (2019 voter) noted that low interest rates pose financial stability risks.

Furthermore, (freshly hawk-turned-dove?) Dallas Fed R.Kaplan (voter) prompted for caution when comes to further rate hikes in light of the recent lower-than-expected inflation figures.

US Dollar relevant levels

The index is losing 0.13% at 97.27 and a breach of 96.31 (2017 low Jun.14) would target 95.91 (low Nov.9 2016) and finally 94.95 (low Sep.22 2016). On the other hand, the next hurdle is located at 97.56 (high Jun.15) followed by 97.63 (38.2% Fibo of the May-June drop) and then 98.04 (50% Fibo of the May-June drop).

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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