- DXY remains near the top of the range close to 96.70.
- Yields of the US 10-year note drop below the 2.0% mark.
- US ADP, ISM Non-manufacturing next of relevance in the docket.
The greenback, in terms of the US Dollar Index (DXY), is alternating gains with losses in the 96.70 region ahead of the opening bell in the Old Continent.
US Dollar Index focused on trade, data
The index navigates within a tight range after clinching multi-day peaks near 96.90 on Monday, all following the resurgence of US-EU trade tensions and rising skepticism around the resumption of the US-China trade talks.
As uncertainty gave way to the pick up in risk aversion, yields of the US 10-year note declined and once again broke below the psychological 2.0% handle, where are now looking to stabilize.
Yesterday, Cleveland Fed L.Mester said in London that shed holds a ‘positive baseline outlook’ on the economy while contemplating the need for lower interest rates.
Busy day in the US calendar ahead of tomorrow’s Independence Day holiday. In fact, June ADP report is due in the first turn seconded by Factory Orders, usual weekly Initial Claims and the key ISM Non-manufacturing.
What to look for around USD
The greenback appears to have lost some upside momentum following Monday’s sharp rebound after the US-China trade truce. Scepticism around the news remains on the raise among investors, somehow carrying the potential to undermine a serious bullish attempt in the buck. This view is also reinforced by speculations of a Fed move on rates in the short-term horizon, while the Fed is expected to keep the data-dependent stance intact and continues to scrutinize the US-China trade situation and uncertainty in global growth.
US Dollar Index relevant levels
At the moment, the pair is losing 0.01% at 96.73 and a breach of 96.62 (200-day SMA) would aim for 95.82 (low Feb.28) and then 95.74 (low Mar.20). On the other hand, the next up barrier lines up at 96.88 (monthly high Jul.2) seconded by 97.08 (100-day SMA) and finally 97.77 (high Jun.18).
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