US Dollar upside stalled near 103.50, US ISM eyed

The greenback, tracked by the US Dollar Index (DXY), is extending its weekly upside, although the bull run seems to have lost momentum ahead of 103.50 for the time being.

US Dollar now looks to ISM

The index is advancing for the second session in a row so far today, rebounding sharply after briefly testing lows in sub-102.00 levels on Monday.

Recall that the Dollar has come under significant selling pressure during the last part of 2016 as market participants remained sceptics over the ability of the Federal Reserve to hike three times this year, according to the December statement.

In the meantime, US fundamentals remain strong, with both inflation figures and the labour market at shouting distance from the Fed’s targets. Later today, the key ISM Manufacturing is expected to have improved to 53.5 during December, adding to USD upbeat tone.

Somewhat capping the upside in DXY, USD speculative net longs remained around 2-week lows during the week ended on December 27, as shown by the latest CFTC report.

US Dollar relevant levels

The index is gaining 1.02% at 103.41 and a breakout of 103.62 (2016 high Dec.20) would aim for 107.38 (monthly high Dec.2002) and finally 109.25 (monthly high Aug.2002). On the flip side, the immediate support aligns at 102.62 (low Jan.3) followed by 102.18 (20-day sma) and then 101.95 (low Dec.30).