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  • DXY holds on above the 99.00 handle on Monday.
  • US 10-year yields navigate sub-1.70% levels.
  • Markets’ attention will be on ISM, Payrolls and Powell.

The Greenback, in terms of the US Dollar Index (DXY), navigates within a tight range just above the 99.00 mark ahead of the opening bell in Euroland on Monday.

US Dollar Index focused on data, trade

The index is looking to add gains to the ongoing rally above the recently broken 99.00 barrier amidst steady US yields and rising expectations on the resumption of US-China trade talks early in October.

In the meantime, the Greenback stays close to the area of multi-week highs in the 99.10/20 band following the renewed and strong weakness in EUR and GBP, while the selling bias around the Japanese safe haven JPY has been also collaborating with the upside in DXY.

No US data releases scheduled for today should leave markets to remain focused on trade headlines and the broad risk appetite trends. Later in the week, the ISM Manufacturing is due tomorrow followed by Friday’s Non-farm Payrolls and the speech by Fed’s J.Powell.

What to look for around USD

The Greenback remains firm and it has extended the up move beyond the critical 99.00 barrier during last week when tracked by the US Dollar Index (DXY). Sentiment around the buck stays strong amidst a divided FOMC vs. a broad-based dovish stance from the rest of the G-10 central banks. In spite of some key fundamentals appear to have run out of steam in past months, the labour market remains strong as well as consumer spending, while the recent pick up in inflation adds to the auspicious domestic scenario vs. the generalized slowdown in most of overseas economies. Domestic data in combination with politics and developments from the US-China trade front should be key in determining the next decision on interest rates amidst Powell’s ‘mid-term adjustment’. Looking at the broader picture, the positive view on the Dollar is also well underpinned by its safe haven appeal and the status of ‘global reserve currency’.

US Dollar Index relevant levels

At the moment, the pair is losing 0.01% at 99.12 and faces immediate contention at 97.86 (monthly low Sep.13) followed by 97.69 (100-day SMA) and finally 97.17 (low Aug.23). On the other hand, a breakout of 99.28 (high Sep.26) would aim for 99.37 (2019 high Sep.3) and then 99.89 (monthly high May 11 2017).