- The index tested fresh YTD peaks near 96.90 in early trade.
- US 10-year yields stay sidelined near the 2.90% area.
- US Retail Sales, NY Empire State index next of relevance.
The US Dollar Index (DXY), which tracks the greenback vs. its main competitors, is now receding from recent tops in the boundaries of 96.90 and re-testing the 96.70 area.
US Dollar looks to EM, data
The index is extending its march north for the fourth consecutive week so far, clinching fresh 2018 highs at levels closer to the psychological handle at 97.00 the figure and always on the back of a heavy sentiment in the EM FX space, with the Turkish Lira in centre stage.
In addition, DXY stays supported by escalating trade tensions between US and Turkey (apart from China and the EU), with Turkish officials announcing on Tuesday a boycott to US electronic goods and with the situation around US pastor Brunson still unclear.
Looking ahead, the greenback should be in the limelight later in the session following the releases of July’s Retail Sales and the Empire State manufacturing index for the current month.
US Dollar relevant levels
As of writing the index is up 0.06% at 96.73 and a breakout of 96.88 (2018 high Aug.15) would aim for 97.00 (psychological level) and then 97.87 (61.8% Fibo of the 2017-2018 drop). On the downside, the next support lines up at 95.63 (10-day SMA) seconded by 95.12 (21-day SMA) and finally 94.08 (low Jul.26).
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