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  • The index manages to rebound from lows in the 96.20 region.
  • Yields of the US 10-year note drop to lows in sub-3.20% zone.
  • US mid-term elections to grab all the attention.

The US Dollar Index (DXY), which tracks the buck vs. its main competitors, has regained the positive ground and tests the area of daily highs in the boundaries of the 96.40 region.

US Dollar Index looks to politics

The index is reverting Monday’s bearish performance and is now navigating the 96.40 area as the US mid-term elections remain under way.

Consensus among traders expects a Democrats’ victory in the House of Representatives, while Republicans are seen still controlling the Senate. The broad market and FX implications, however, are expected to remain limited.

In the meantime, markets remain focused on the US-China trade spat and the upcoming meeting between President Trump and Xi Jinping at the G20, while Italian politics and Brexit are poised to keep driving the sentiment in the risk-associated universe.

Later in the NA session, JOLTs Job Openings and the IBD/TIPP index are only expected in the calendar.

US Dollar Index relevant levels

As of writing the index is gaining 0.04% at 96.38 and a breakout of 97.19 (2018 high Oct.31) would aim for 97.87 (61.8% Fibo of the 2017-2018 drop) and then 101.34 (high Apr.10 2017). On the downside, the immediate support aligns at 96.02 (21-day SMA) seconded by 95.99 (low Nov.2) and finally 95.37 (55-day SMA).