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US Dollar clinches session tops near 95.30 ahead of Powell, data

  • The index charted an ‘outside day’ to the upside on Tuesday.
  • DXY moved above the 95.00 handle and now targets YTD peaks.
  • Powell, US housing sector, EIA report all coming in next.

The greenback, when tracked by the US Dollar Index (DXY), is extending the weekly upside to the area around 95.30.

US Dollar looks to data, Powell

The index reacted positively to yesterday’s testimony by Chief J.Powell, while markets are now pricing in almost 90% of a rate hike at the September 26 meeting.

At his semi-annual testimony before the Senate Banking Committee, Powell reiterated the gradual stance of the Federal Reserve regarding its tightening cycle, while he expects low inflation and a strong labour market to still prevail in the years to come.

In the meantime, the buck keeps pushing higher following yesterday’s ‘outside day’ candle and has once again shifted its focus to the mid-95.00s, where sits the 2018 peaks.

Later in the session, Fed’s J.Powell will testify before the House Financial Services Committee, with consensus looking at the Q&A session as the statement is expected to be a ‘copy-paste’ from yesterday’s testimony.

In addition, Housing Starts, Building Permits are due seconded by the EIA’s report on US crude oil supplies and the release of the Fed’s Beige Book.

US Dollar relevant levels

As of writing the index is up 0.22% at 95.18 facing the next resistance at 95.26 (high Jul.18) seconded by 95.53 (2018 high Jun.21) and finally 96.00 (psychological handle). On the downside, a breach of 94.68 (21-day sma) would target 94.60 (10-day sma) en route to 94.04 (23.6% Fibo of the April-June up move).

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