US Dollar gathering traction around 98.50

The greenback – tracked by the US Dollar Index (DXY) – has started the week on a positive footing so far, looking to pick up pace from recent lows in the mid-98.00s.

US Dollar bid after Payrolls

The index remains below the critical 12-month resistance (previous support) line – currently at 99.05 – which has been supporting the constructive stance for the buck in past months, against a context of firm risk-on sentiment mainly emanated from the recent results in the French presidential elections.

Lending oxygen to the buck, April’s Payrolls figures have come in on the strong side last Friday, showing the US labour market stays strong albeit wage inflation pressures still lack of sustainable traction.

On the positioning front, USD speculative net longs have receded to the lowest level since early October 2016 during the week ended on May 2, according to the latest CFTC report.

Looking ahead, the Fed’s Labor Market Conditions Index is due seconded by speeches by St Louis Fed J.Bullard (2019 voter, centrist) and Cleveland Fed L.Mester (2018 voter, hawkish).

US Dollar relevant levels

The index is gaining 0.10% at 98.52 facing the next hurdle at 99.05 (12-month resistance line) ahead of 99.09 (200-day sma) and finally 99.34 (high May 4). On the flip side, a break below 98.41 (2017 low May 5) would aim for 96.94 (low Nov.4 2016) and then 95.91 (low Nov.9 2016).