US Dollar extends the recovery above 94.70

The greenback, in terms of the US Dollar Index (DXY), keeps the rebound alive on Thursday, now flirting with session tops in the 94.70/75 band.

US Dollar focus on data, ECB

The index is navigating its second consecutive day with gains after three sessions with losses, including a test of fresh lows in the vicinity of 94.20, levels last seen in August 2016.

The buck has regained some attention in response to a now calmer US political scenario following the ‘Trumpcare’ fiasco, while increasing cautiousness among investors ahead of the key ECB gathering due later today is also lending support to USD.

All eyes on the ECB then, as another hawkish message from President Draghi could impact on the greenback and force DXY to re-visit the area of recent lows near 94.20. Market consensus, however, seems to favour a more significant message at the September meeting and expects Draghi to hint at some modification of the central bank’s monetary stance at the Jackson Hole Symposium in August.

On the US data front, the usual weekly report on the labour market is due followed by the Philly Fed manufacturing index.

US Dollar relevant levels

The index is up 0.08% at 94.72 facing the next hurdle at 95.16 (10-day sma) seconded by 95.67 (21-day sma) and finally 96.25 (high Jul.5). On the flip side, a break below 94.27 (2017 low Jul.18) would open the door to 94.20 (low Aug.26 2016) and then 94.05 (low Aug.18 2016).