Dollar Index extends gains, eyes 93.00

The greenback continued to rise during the American session, extending the recovery that started on Tuesday. Yesterday the Dollar Index hit 91.51, the lowest level since January 2015. Afterwards reversed sharply and has been rising since then. At the moment it trades at 92.85, the strongest since Friday and holds a bullish tone. 

USD supported by data

On Tuesday, DXY finished higher after a significant recovery, signaling that a potential interim bottom is in place. Today’s rally brightens the short-term outlook for the US dollar. 

The greenback received an impulse today after US economic data. The ADP report and the second estimate of Q2 GDP, both, surpassed expectation. The ADP private sector employment for August came at 237K versus 185K expected (the report included an upward revision of July numbers). Regarding GDP, the second estimate of Q2 growth showed the economy expanding at 3.0% (highest since Q1 2015). The next key report will be on Friday: NFP. 

US bond yields remain mostly unchanged despite the upbeat economic reports. If yields start to move higher, it could support another up-move of the greenback. 

DXY Technical levels 

To the upside, resistance levels might be seen at 93.00 (psychological), 93.15 (20-day moving average) and 93.80 (Aug 8 & 9 high). On the downside, support could be located at 92.40 (Aug 2 low) and 92.20 (daily low).