US dollar index consolidates gains, hovering near 100.00

The US dollar index dropped back below the 100.00 but is still headed toward another daily gain and the highest close in almost a year. Greenback rose again in the currency market particularly against its European rivals and the yen, extending the rally that started after the US elections. 

On Monday, during the America session it peaked at 100.20 and then dropped to 99.78. Near the end of the session, it was hovering slightly below 100.00 as the rally of equity prices in Wall Street was losing strength. The Dow Jones was flat after being unable to hold to gains while the S&P 500 was losing 0.12%. US bond yields were rising again, at multi-month highs. The 10-year was at 2.22%, after reaching 2.285%. 

DXY Technical levels 

To the upside, resistance could be seen at 100.20 (daily high) and 100.50 (Nov 2015 highs). On the opposite direction, support levels might be seen at 99.10 (last week high) 98.50 (Nov 10 & 11 low) and 98.20 (20-day moving average). 

Data and events ahead 

Tomorrow in the US the retails sales will be release, on Wednesday the PPI and on Thursday the CPI. Janet Yellen will testify on Thursday before the Joint Economic Committee of Congress. It would be the first public appearance since Trump’s election. 

Uncertainty lies not only on Fed’s monetary policy but also on his mandate. “This speech will be crucial not just for short-term market expectations in regard to the December FOMC but also in regard to longer-term expectations of monetary policy in circumstances of an aggressive fiscal stimulus program”, said analyst from The Bank of Tokio Mitsubishi. 

To learn more about this topic, check our video analysis.

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