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  • The index extends the rejection from recent tops beyond 96.00.
  • Yields of the US 10-year note also drop further to 3.18%.
  • US Factory Orders expanded 2.3% MoM, more than expected.

In terms of the US Dollar Index (DXY), the greenback is navigating in the red territory for the first time since last Wednesday and is now testing lows in the 95.70/65 band.

US Dollar comes down from 96.00 and above

USD-sellers stepped in earlier in the session after the index clinched fresh 6-week peaks beyond 96.00 the figure, bolstered by the hawkish comments from Fed’s Jerome Powell at his interview late on Wednesday.

However, the positive mood around the buck deflated following the opening bell in Euroland and along a correction lower in yields of the key US 10-year note, coming down from tops beyond 3.20%, levels last seen in July 2011.

In the data space, Challenger Job Cuts came in at 70.9% YoY while Initial Claims rose at a weekly 207K, bettering prior surveys and taking the 4-Week Average to 207.00K from 206.50K. Additional data saw Factory Orders surprising to the upside and expanding at a monthly 2.3% in August.

Moving forward, markets are expected to trade within a narrow range as we slowly enter into the pre-Payrolls lull.

US Dollar Index relevant levels

As of writing the index is losing 0.44% at 95.62 and a breach of 95.10 (55-day SMA) would aim for 94.87 (21-day SMA) and then 93.81 (low Sep.17). On the upside, the next hurdle emerges at 96.12 (high Oct.4) seconded by 96.98 (2018 high Aug.13) and finally 97.87 (61.8% Fibo retracement of the 2017-2018 drop).