US Dollar flirting with highs near 96.80

After bottoming out in fresh YTD lows around 96.60 on Friday, the US Dollar Index – which tracks the buck vs. its main competitors – found some fresh buyers and is now testing the area of session highs near 96.80.

US Dollar focus on data

The index quickly plummeted to sub-97.00 levels on Friday after the US monthly labour market report showed the economy created less jobs than expected while pressure on wages still remain laggard.

The figures hit US yields, forcing the 10-year reference to briefly drop below 2.15% for the first time since early November, despite the probability of a rate hike later in the month still stay above 90%, according to CME Group’s FedWatch tool.

Following the recent payrolls results, the evolution of inflation figures are poised to grow in importance, as market participants are expected to weigh it against the likeliness of further tightening by the Fed in the next months.

Ahead in the session, the ISM non-manufacturing is due seconded by Markit’s Services PMI, factory orders, unit labor costs and non-farm productivity.

US Dollar relevant levels

The index is advancing 0.14% at 96.75 and a breakout of 97.26 (high Jun.2) would open the door to 97.70 (high May 30) and then 97.73 (20-day sma). On the flip side, the immediate support is located at 96.61 (2017 low Jun.2) followed by 95.91 (low Nov.9 2016) and finally 94.95 (low Sep.22 2016).