US Dollar flat around 101.60 ahead of FOMC

The greenback, tracked by the US Dollar Index, is trading almost unchanged at the beginning of the week, currently hovering over the 101.60 area.

US Dollar finds support near 101.50

The index is navigating a tight range on Monday as market participants continue to adjust to the potential 25 bp rate hike by the Federal Reserve at its meeting on Wednesday.

In the meantime, USD is looking to consolidate November’s rally around the mid-101.00s, with gains so far capped by the 13-year top above the 102.00 handle and support around last week’s lows in the mid-99.00s.

Expectations of further tightening by the Fed on Wednesday, prospects of higher inflation in the US economy in the next months and a persistent steady/dovish stance from Fed peers all continue to give support to the buck.

Adding to the above, the latest CFTC report showed USD speculative net longs have climbed at the highest level since August 2015 on the week to December 6.

US Dollar relevant levels

The index is losing 0.03% at 101.57 and a breakdown of 101.06 (20-day sma) would aim for 99.87 (low Dec.5) and finally 99.49 (low Dec.8). On the flip side, the initial hurdle is located at 101.80 (high Dec.5) ahead of 101.88 (high Nov.30) and finally 102.12 (2016 high Nov.24).