US Dollar fades uptick to weekly highs, consolidates near mid-93s

The NA session beginning brought another wave of USD buying, pushing the US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, to a fresh weekly high at 93.77. However, the index struggled to conserve its bullish momentum and is now at 93.45, losing 0.03% on the day.

The index is having a difficult time determining its near-term direction as the data from the U.S. allows the greenback to gather strength against most of its rivals while the risk aversion keeps the demand higher for safe-haven currencies like the CHF and the JPY amid increasing tension between the United States and North Korea. However, U.S. Secretary of State Rex Tillerson eased the concerns a little bit as he said that President Trump was just trying to send a strong message in the language its leader would understand, as per CNBC reported.

Earlier in the session, Charles Evans, President of the Federal Reserve Bank of Chicago, said that he was expecting the balance sheet reduction to start in September and added that another rate hike in December would be appropriate. However, Evans' remarks failed to spark volatility as they were no surprises to investors. 

• Fed’s Evans: December Fed rate hike possible, depends on inflation
• Fed’s Bullard: No need to be pre-emptive amid weak inflation

Technical outlook

The index faces the initial hurdle at 93.77/80 (daily high/Jul. 28 high) ahead of 94.20 (Jul. 21 high) and 95 (psychological level/Jul. 20 high). On the downside, supports are located at 93 (psychological level), 92.40 (Aug. 2 low), and 91.90 (May 3, 2016, low).

• Goldman analysts say they are not yet ready to call for sustained dollar weakness - Reuters