US Dollar lost momentum near 94.00

The US Dollar Index (DXY) – which tracks the buck vs. its main rival currencies – has now receded to the 93.60 area after climbing as high as the boundaries of the 94.00 limestone earlier in the day.

US Dollar in 7-week tops

Despite the current correction from session tops, the index so far manages well to keep business around 7-week peaks and closer to the critical 94.00 barrier.

The up move in the buck has been almost exclusively supported by the solid performance from yields in the US money markets. Yields of the key 10-year reference are currently hovering over the 2.35% region, a couple of basis points lower than yesterday’s tops above 2.37%.

In addition, expectations of the potential implementation of the long-waited tax reform by the Trump administration later in the year are also underpinning the current bullish momentum around the buck.

In the US data space, the only event of note will be the speech by FOMC’s J.Powell ahead of the weekly report on US crude oil supplies by the American Petroleum Institute (API).

US Dollar relevant levels

As of writing the index is gaining 0.05% at 93.53 facing the immediate resistance at 93.91 (high Oct.3) 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 92.98 (55-day sma) would open the door to 92.95 (low Sep.29) and finally 92.43 (21-day sma).