US Dollar pushing higher, 99.00 on sight

The greenback continues to recover ground lost on Monday, now pushing the US Dollar Index (DXY) to the boundaries of the key barrier at 99.00 the figure.

US Dollar focus on 200-day sma

The index moved higher following the sell-off in the risk-associated space, particularly in EUR after the victory of Emmanuel Macron at the second round of the French elections on Sunday.

USD has thus managed to leave behind Friday’s 2017 lows near 98.40 after the US labour market report showed the economy created more jobs than initially estimated during last month, although wage growth still remains laggard.

Earlier in the session, Cleveland Fed Loretta Mester (2018 voter, hawkish) has advocated for further tightening sooner rather than later while she warned against the Fed’s falling behind the curve. On the opposite side, St. Louis Fed James Bullard (2019 voter, dovish) said the Fed does not need to raise rates higher.

On the positioning front, USD remains under pressure after 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.

Data wise today, the Fed’s Labor Market Conditions Index came in at 3.5, down a tad from the previous 3.6.

US Dollar relevant levels

The index is gaining 0.48% at 98.89 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).