US Dollar off highs, retreats to 101.20

The greenback, gauged by the US Dollar Index, is trading on the defensive at the beginning of the week, navigating the area of 101.20 ahead of the opening bell in Europe.

US Dollar upside capped by 101.50

USD is giving away part of recent gains to fresh tops in the mid-101.00s, levels last seen in March 2003, as some profit taking among market participants seems to have gathered traction since early in Asia today.

In the meantime, there is no change in the broader picture favouring the buck, namely rising expectations of a rate hike by the Federal Reserve at its December meeting. Currently, CLE Group’s FedWatch tool sees the probability of that scenario at above 95%, based on Fed Funds futures prices

Nothing scheduled data wise in the US docket today, with only Fed’s Vice Chair S.Fischer (permanent voter, hawkish) expected to speak on ‘Longer-term Challenges for the US Economy’.

Regarding positioning, USD speculative net longs have retreated to 4-week lows during the week ended on November 15, as reported by the latest CFTC report

US Dollar relevant levels

The index is losing 0.23% at 101.18 facing the next support at 99.38 (low Nov.14) ahead of 99.13 (high Nov.11) and finally 98.93 (20-day sma). On the upside, a break above 101.54 (2016 high Nov.18) would open the door to 102.19 (monthly high Apr.2003) and then 102.68 (monthly high March 2003).