US Dollar Index recedes from tops, back near 98.20

• DXY gives away part of Friday’s gains, back to the 98.25/20 band.
• US 10-year yields gain traction, approaching 1.80%.
• Chicago Fed index only due later in the day.

The US Dollar Index (DXY), which gauges the greenback vs. a bundle of its main rivals, is struggling for direction in the 98.25/30 band ahead of the opening bell in Euroland.

US Dollar Index stays focused on trade, data

The index is looking to add to Friday’s advance to the 98.30/40 area, or weekly highs, amidst the absence of significant headlines around the US-China trade war and positive results from the US docket in past sessions.

In fact, Friday’s improvement in the final prints of US Consumer Sentiment tracked by the U-MIch index have given extra oxygen to the buck against the back drop of the usual rhetoric by President Trump that a deal with China is ‘close’, all helping the index to close the week on a positive note.

In the docket, the Chicago Fed index will be the sole release later today ahead of the Consumer Confidence gauge by the Conference Board and New Home Sales on Tuesday and another estimate of the Q3 GDP and PCE figures on Wednesday.

What to look for around USD

The index has regained the 98.00 handle and above during last week amidst alternating risk appetite trends and positive results from the US calendar. In the meantime, headlines from the US-China trade dispute are expected to remain as the exclusive driver when comes to price action in the global markets, while investors keep monitoring US fundamentals amidst the ‘wait-and-see’ stance from the Federal Reserve and the steepening of the 2y-10y yield curve seen as of late. Moving to US politics, the Trump’s impeachment process remains underway although with muted impact on the FX space for thee time being. On the broader view, however, the outlook on the greenback still looks constructive on the back of the Fed’s ‘wait-and-see’ mode vs. the dovish stance from its G10 peers, the dollar’s safe haven appeal and the status of ‘global reserve currency’.

US Dollar Index relevant levels

At the moment, the pair is losing 0.03% at 98.24 a breakout of 98.45 (monthly high Nov.13) would open the door to 99.25 (high Oct.8) and then 99.67 (2019 high Oct.1). On the other hand, immediate contention is located at 98.05 (100-day SMA) seconded by 97.68 (low Nov.18) and finally 97.58 (200-day SMA).