US Dollar holding on to 95.00, focused on trade, PBoC

• The index stays on the defensive albeit still above 95.00.
• US 10-year yields close to session peaks above 2.97%.
• EIA weekly report on crude oil stockpiles next on tap.

The greenback, in terms of the US Dollar Index (DXY), is extending the weekly correction lower although decent contention remains in the 95.00 neighbourhood fo r the time being.

US Dollar looks to trade, China

The index is down for the second consecutive session so far on Wednesday following Monday’s failed attempt to break above the critical resistance area around 95.50.

The buck keeps closely following the headlines from the US-China trade front, while extra attention deserves recent moves by the PBoC in order to stabilize the Yuan and prevent it for falling further. In this context, USD/CNY dropped and briefly tested the key support at 6.80 during early trade, collaborating with the soft tone around the buck.

In the meantime, the vacuum of data releases in the US docket plus absent relevant events should keep the focus on the trade front. Later in the day, the EIA will publish its weekly report on US crude oil supplies.

US Dollar relevant levels

As of writing the index is losing 0.08% at 95.10 facing the next support at 94.98 (low Aug.3) seconded by 94.87 (10-day SMA) and finally 94.52 (55-day SMA). On the upside, a breakout of 95.20 (high Aug.6) would aim for 95.38 (high May 29) and then 95.53 (high Jun.28).