US Dollar remains confined in tight range below 94

• DXY struggles to recover above 94 amid a lack of fundamental drivers.
• Participants mostly ignored upbeat data from the U.S.
• FOMC minutes likely to be the next catalyst ahead of Thanksgiving break.

The US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, renewed its weekly high at 94.08 in the first half of the day but failed to push as the falling US T-bond yields weighed on the buck. After edging lower to 93.80, the index went into a consolidation phase and was last seen at 93.85, down 0.15 on the day.

US data surprises to the upside on Tuesday

Today's data from the U.S. showed that existing home sales increased by 2% to5.48 million on a monthly basis in October. Furthermore, boosted by a robust increase in the production sub-index, the Chicago Fed National Activity Index (CFNAI) improved to 0.65 points from 0.36 in October. However, these data failed to grab the investors' attention and a 1.5% drop witnessed in the 10-year T-bond yield in the early American trading hours dragged the index lower.

Although bond yields recovered a majority of their daily losses in the US afternoon, the index stayed near its daily lows as the thin trading volume, and a lack of fundamental catalysts didn't allow a meaningful recovery. 

On Wednesday, the FOMC is going to release November meeting minutes. Even if the statement triggers a knee-jerk reaction, the impact on the greenback is likely to remain short-lived. "The Federal Reserve will release the minutes/record of its most recent meeting this week in which the FOMC meeting was as much of a non-event as its meetings can be, with no forecast updates, press conference, or new initiatives," BBH analysts wrote in a recent report.

Technical levels to consider

The immediate hurdle for the index aligns at 94 (psychological level) ahead of 94.65 (Nov. 14 high) and 95.00/05 (psychological level/Oct. 27 high/Nov. 7 high). On the downside, supports could be seen at 93.50 (Nov. 20 low), 93 (psychological level/Oct. 20 low) and 92.30 (Sep. 26 low).