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  • DXY moves further north of 98.00 and prints multi-day tops.
  • US 10-year yields approach the 1.55% area.
  • Housing Starts, Building Permits, U-Mich index next on the docket.

The Greenback, tracked by the US Dollar Index (DXY), is extending the recent breakout of the 98.00 mark and is flirting with two-week highs in the 98.20/25 band.

US Dollar Index up on data, looks to trade

The index is posting gains uninterruptedly since Monday, managing at the same time to regain the key barrier at 98.00 the figure and beyond sustained by upbeat results from the docket and somewhat tempered concerns from the US -China trade front.

In fact, yesterday’s positive performance of Retail Sales and better-than-expected results from the Philly Fed index and the NY Empire State index lent extra legs to the buck and lifted yields from recent lows removing at the same time some tailwinds from safe haven demand.

Later today, the US housing sector will be in the limelight along with the preliminary print of Consumer Sentiment measured by the U-Mich index.

What to look for around USD

Trade concerns, while still unabated and in combination with the current inversion of the yield curve, carry the potential to spark further ‘insurance cuts’ by the Federal Reserve and thus undermine the constructive prospects of the buck in the next months. Opposed to this view emerges the Greenback’s safe have appeal, the status of ‘global reserve currency’, so far solid US fundamentals vs. overseas economies and the less dovish stance from the Federal Reserve (as per the latest FOMC event).

US Dollar Index relevant levels

At the moment, the pair is gaining 0.03% at 98.18 and faces the next resistance at 98.37 (monthly high May 23) followed by 98.93 (2019 high Aug.1) and the 99.89 (monthly high May 2017). On the other hand, a break below 97.78 (21-day SMA) would aim for 97.21 (low Aug.6) and then 96.96 (200-day SMA).