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  • The greenback keeps the positive tone near 96.70.
  • US 10-year yields tested daily highs near 3.12%.
  • US Core PCE rose more than forecasted in September.

Gauged by the US Dollar Index (DXY), the greenback has now resumed the upside and is challenging daily highs in the vicinity of 96.70.

US Dollar Index bid after PCE

The index left behind the initial selling bias and has now recovered the buying interest, moving to the upper end of the daily range in the 96.65/70 band, at shouting distance from Friday’s 2-month tops beyond 96.80.

Today’s rising political concerns in Germany eclipsed the somewhat better mood in the Italian markets after agency S&P left unchanged the country’s credit rating at the end of last week, although it did revise lower the outlook to ‘negative’ from ‘stable’.

Further support for the buck came in from the US docket, where inflation figures measured by the Core PCE rose more than expected at a monthly 0.2% and 2.0% on a year to September. Further data saw Personal Income expanding 0.2% MoM and Personal Spending rising 0.4% inter-month.

US Dollar Index relevant levels

As of writing the index is gaining 0.15% at 96.55 facing the next hurdle at 96.86 (high Oct.26) seconded by 96.98 (2018 high Aug.13) and finally 97.87 (61.8% Fibo of the 2017-2018 drop). On the downside, a breakdown of 96.03 (10-day SMA) would open the door to 95.74 (21-day SMA) and finally 94.79 (low Oct.12).