US Dollar flirting with tops around 97.00

The greenback – in terms of the US Dollar Index (DXY) – is looking to extend the rebound from last Friday’s lows in the 96.90/85 band and is now attempting to retake the critical 97.00 handle.

US Dollar eyes on data

The index stays within the recent range around 97.00 the figure, struggling for direction and mildly supported by earlier comments from San Francisco Fed J.Williams (2018 voter, centrist), who now expects the Fed’s balance sheet to start shrinking later in the year.

DXY has been navigating between 97.00 and 97.50 for the last two weeks despite the Fed rose its Fed Funds target range to 1.00%-1.25% at its last meeting and signalled that further tightening remains on the cards later in the year. However, the lack of conviction among investors and softer-than-expected results from the US docket seem to have alleviated some upside potential around the buck.

Furthermore, yields of the US 10-year benchmark appear to have found some decent support around 2.14% for the time being, lending some oxygen to the ongoing bounce in USD.

News from the speculative community saw USD net longs retreating to levels last seen in mid-June 2016 during the week ended on June 20, as shown by the latest CFTC report.

In the US data space, durable good orders for the month of May are due next, while Fedspeak should take centre stage later in the week.

US Dollar relevant levels

The index is up 0.01% at 96.98 facing the next hurdle at 97.04 (20-day sma) followed by 97.13 (23.6% Fibo of the May-June drop) and then 97.56 (high Jun.15). On the other hand, a breach of 96.86 (low Jun.23) would open the door to 96.31 (2017 low Jun.14) and finally 95.91 (low Nov.9 2016).