US Dollar upside struggles near 97.00

Pablo Piovano FXStreet

The greenback, in terms of the US Dollar Index, is clinging to its daily gains on Tuesday, although a more sustainable breakout of the key 97.00 barrier remains elusive for the time being.

US Dollar keeps gains despite US data

The index managed to grab some buying interest today despite the preliminary reading of Markit’s Manufacturing PMI for the current month missed expectations. In the same direction, New Home Sales dropped to 569K units in April, or 11.4% vs. 610K forecasted and April’s 642K.

The broader picture stays bearish for the greenback in the very near term, although the FOMC minutes due tomorrow are expected to come on the hawkish side, alleviating somewhat the persistent selling pressure around the buck.

Extra downside pressure for USD is expected to come from US politics in the near term horizon, with President Trump still far from alleviating concerns over his administration, particularly following the (still unresolved) ‘Russia-gate’.

On the positioning front, USD is also under scrutiny as the speculative community has reduced its net long positions to the lowest since early October during the week ended on May 16 according to the latest CFTC report.

US Dollar relevant levels

The index is up 0.07% at 96.95 and a breakout of 97.25 (high May 22) would open the door to 97.97 (high May 18) and finally 98.52 (20-day sma). On the other hand, the next support lines up at 95.91 (low Nov.9 2016) followed by 94.95 (low Sep.22 2016) and finally 94.94 (low Sep.8 2016).

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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