US Dollar appears weak around 93.20

The US Dollar Index – which gauges the buck vs. a basket of its main rivals – is extending its weekly correction lower and is now testing the 93.20/10 band.

US Dollar recedes from tops

The index is slowly retracing its advance to the 93.60/70 band following the solid prints from the US labour market for the month of July, currently on its way to test the 10-day sma in the 93.15 area, which should offer initial support.

USD is drifting lower following some profit taking mood in light of the recent strong advance, although investors seem to scale back their long positions as expectations of a rate hike by the Federal Reserve at some point in Q4 appear unmoved despite the labour market performance as of late.

In addition, St. Louis Fed J.Bullard (2019 voter, dovish) said on Monday the Fed should refrain from tightening further its monetary conditions for the time being, adding that current low inflation justifies an ‘on hold’ stance and that the short-term interest rates levels are appropriate.

In the data space, NFIB’s business optimism index is due later seconded by JOLTs Job Openings.

US Dollar relevant levels

The index is losing 0.14% at 93.17 and a breakdown of 93.13 (10-day sma) would open the door to 92.41 (2017 low Jul.31) and finally 91.88 (2016 low May 3). On the flip side, the immediate hurdle aligns at 93.64 (high Aug.4) seconded by 93.91 (21-day sma) and then 94.11 (high Jul.26).