US Dollar parked around 93.60

The buck keeps gravitating around 93.60 when tracked by the US Dollar Index on Monday, all against the backdrop of marginal volatility and thin trading conditions.

US Dollar keeps the area of 4-week tops

The index is struggling to extend gains for the fifth consecutive week so far today, navigating a very narrow range around the 93.60 area while US bonds markets stay closed due to the Columbus Day holiday.

USD is alternating gains with losses at the beginning of the week, always looking to yields of the key US 10-year reference, which tested the area of 2.40% soon after Friday’s payrolls results, levels last seen in early May.

In the meantime, the FOMC minutes (Wednesday) appear the immediate risk event for the buck, while investors keep the optimism intact on the potential implementation of the tax reform by end 2017.

The progress of Trump’s tax reform proposal, the debt ceiling issue and headlines from North Korea all appear to stay as the main drivers for the buck’s price action in the month to come, as investors seem to have already priced in a third rate hike by the Federal Reserve at the December meeting.

US Dollar relevant levels

As of writing the index is losing 0.03% at 93.59 facing the initial support at 92.95 (200-day sma) seconded by 92.81 (10-day sma) and then 91.01 (2017 low Sep.4). On the upside, a breakout of 94.27 (high Oct.6) seconded by 94.35 (21-day sma) and finally 95.90 (38.2% Fibo of the 2017 drop).