US Dollar upside halted ahead of 94.00

The upbeat sentiment around the greenback stays well and sound on Monday, with the US Dollar Index (DXY) now easing some pips after climbing to the boundaries of 94.00 the figure.

US Dollar tracking US yields

The index is back to the 93.90/85 band following a drop in yields of the US 10-year reference from daily highs just below the 2.40% limestone to the current 2.36% neighbourhood.

In spite of the correction lower, the buck’s momentum remains bolstered by the usual suspects: an almost priced in move by the Fed at the December meeting, the likelihood of the implementation of the tax reform proposed by the White House at some point by year-end and a potential hawk at the helm of the Federal Reserve when Chair Yellen finishes her term. On the latter, President Trump is expected to make a decision in the upcoming days.

Data wise today, the Chicago Fed National Activity Index surpassed estimates at 0.17 for the month of December.

News from the speculative community noted investors trimmed their USD net short positions to the lowest level in the last 4 weeks in the week to October 17, as per the latest CFTC report.

US Dollar relevant levels

As of writing the index is gaining 0.24% at 93.92 and a break above 94.03 (23.96% Fibo of the 2017 drop) would aim for 94.13 (100-day sma) and finally 94.27 (high Oct.6). On the flip side, the immediate support aligns at 93.36 (21-day sma) seconded by 93.06 (low Oct.19) and then 92.94 (55-day sma).