US dollar index trims losses and rises back above 98.50

The US dollar is about to finish the day with mix results, with gains versus the yen and commodity currencies but lower against its European rivals. Greenback gained momentum during the American session except against the pound. Cable remained near the highs at all times, with the pound recovering ground in the market after yesterday’s decline. 

The US dollar index which gauges the US dollar against its main competitors bottomed at 98.26, the lowest since last Thursday. Then it rebounded and rose toward 98.60. It was trading at 98.55, marginally below yesterday’s closing price. 

Today’s decline in the DXY represents a modest correction after giving signals of some exhaustion to the upside yesterday when the index peaked at 99.05 (8-month high). It pulled back from the top, making an important intraday reversal and ended the day lower. 

On a wider perspective, the dollar index holds a bullish tone. Friday’s US 3Q GDP numbers could boost it back again toward 99.00 or could favor a more sustain correction. 

Technical levels 

To the upside, resistance levels could be seen at 98.75 (Oct 26 high),  99.00/05 (Oct 24 high) and 99.30/35 (Jan 12, 13 & 14 high). On the downside, support might lie at 98.25 (Oct 21 & 26 low) and 98.10 (Oct 13, 14 & 17 high).