US Dollar off highs, returns to 93.30

In terms of the US Dollar Index, the greenback is now giving away some pips and is returning to the 93.30 region after testing fresh tops near 93.50 earlier in the session.

US Dollar focus on data, yields

The index is adding to Friday’s gains backed by the solid performance from US yields, where the 10-year benchmark clinched tops in the 2.36% area during early trade, losing some upside momentum afterwards.

Political risks in the euro area following yesterday’s independence referendum and turmoil in Catalonia have weighed on the European currency at the very beginning of the Asian session, dragging EUR/USD lower and thus bolstering the momentum around USD.

In addition, optimism around the recently announced tax reform plans by President Trump, seems to have returned to the markets and is also another driver propping up the buck.

On the positioning front, USD net shorts climbed to the highest level since early April 2014 in the week to September 26, as per the latest CFTC report.

Data wise in the US calendar, the ISM manufacturing for the month of September is due, seconded by Markit’s manufacturing PMI for the same period and the speech by Dallas Fed R.Kaplan (voter, hawkish).

US Dollar relevant levels

As of writing the index is gaining 0.40% at 93.28 facing the immediate resistance at 93.66 (high Sep.28) followed by 94.03 (23.6% Fibo of the 2017 drop) and finally 94.14 (high Aug.16). On the other hand, a breach of 93.00 (55-day sma) would open the door to 92.72 (10-day sma) and finally 91.53 (low Sep.20).