US Dollar approaching 97.30, session tops

The US Dollar Index, which tracks the buck vs. its main rivals, has reverted the negative start and is now heading towards daily highs around 97.30.

US Dollar up on yields

Fresh buyers seem to have emerged around the 97.00 handle today, sparking the ongoing correction higher amidst a continuation of the recent rebound in US yields.

In fact, the 10-year benchmark is advancing for the fourth consecutive session so far today, sustaining the climb in the buck and paving the way for a potential test of Friday’s tops near 97.50.

Ahead in the week, USD should remain under pressure in light of the FOMC meeting on Wednesday, key US inflation figures and retail sales.

Market consensus expects the Committee to deliver a hawkish message while the timing of the reduction of the Fed’s balance sheet and the ability of the Fed to achieve its 3 rate hikes projections for this year should be in the centre of the debate.

On another direction, the speculative community has increased its net longs to 2-week peaks in the week to June 6, reverting a steady decline prevailing since mid-April, all as per the latest CFTC report.

US Dollar relevant levels

The index is up 0.02% at 97.26 and a break above 97.47 (high Jun.9) would open the door to 97.70 (high May 30) and finally 98.11 (50% Fibo of the May-June drop). On the downside, the next support aligns at 96.45 (2017 low Jun.7) followed by 95.91 (low Nov.9 2016) and then 94.95 (low Sep.22 2016).