US Dollar index remains bid above 97.00

• The index is extending the up move to the vicinity of 97.00.
• Yields of the US 10-year note drop to the 3.20% area.
• US Producer Prices, U-Mich index next on tap.

The US Dollar Index (DXY), which gauges the greenback vs. a basket of its main rivals, has extended the upbeat tone to the 96.90 region on Friday, where met some sellers.

US Dollar Index looks to data

The index is up for yet another session, prolonging the rebound from Wednesday’s 2-week lows in the 95.70/65 band to the area just below the critical 97.00 mark.

The buck is deriving support from the continuation of the softer tone in the risk-associated universe, where the Brexit negotiations and Italian politics remain in centre stage.

Also sustaining the up move in the index, yesterday’s FOMC statement left the door open for the continuation of the tightening cycle by the Federal Reserve, with consensus among investors almost fully pricing in the fourth rate hike this year at the December meeting.

Looking ahead, October’s Producer Prices are due next seconded by the preliminary figures for US Consumer Sentiment for the current month.

US Dollar Index relevant levels

As of writing the index is gaining 0.14% at 96.79 and a breakout of 96.92 (high Nov.9) would open the door to 97.19 (2018 high Oct.31) and then 97.87 (61.8% Fibo retracement of the 2017-2018 drop). On the flip side, the next support emerges at 95.56 (10-day SMA) followed by 96.17 (21-day SMA) and finally 95.68 (low Nov.7).