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  • The index extends the upside to the mid-94.00s, fresh YTD peaks.
  • The greenback gains extra ground on increasing EUR weakness.
  • Political uncertainty in Italy weighs on EUR and fuels the buck’s upside.

The US Dollar Index (DXY), which tracks the greenback vs. its main rivals, has reverted the initial pessimism and is now flirting with session peaks in the 94.50 region.

US Dollar in multi-month tops

The index has started the week on a positive note and is currently hovering over levels last seen in early November. Furthermore, DXY is extending the rally for the third week in a row after having advanced in six out of the last seven weeks.

Renewed optimism over the Trump-Kim Jong meeting, easing fears over a potential US-China trade war, divergence in monetary policy between the Federal Reserve and its peers, positive outlook for the US economy as opposed to the (temporary?) slowdown in the EU and increasing jitters on Italian politics hurting EUR are all underlying the robust momentum in the greenback.

In the data space, this week will bring in the Conference Board’s Consumer Confidence reading on Tuesday, the ADP employment report and another estimate of Q1 GDP on Wednesday, inflation figures gauged by the PCE on Thursday and the ISM Manufacturing and May’s Non-farm Payrolls on Friday.

US Dollar relevant levels

As of writing the index is gaining 0.17% at 94.43 facing the next resistance at 94.49 (2018 high May 28) followed by 95.15 (monthly highs Oct/Nov. 2017) and finally 96.51 (high Jul.4 2017). On the flip side, a breakdown of 93.74 (10-day sma) would target 93.30 (low May 21) en route to 93.14 (21-day sma).