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US dollar index pushes higher and clinches weekly tops near 98.40

US dollar index pushes higher and clinches weekly tops near 98.40

The US Dollar Index (DXY), which gauges the Greenback vs. a bundle of its main rivals, keeps the bid tone and moves to the 98.40 region, or weekly highs.

29 August 2019, OctaFX – The index is up for the second day in a row, extending the bullish momentum well above the key barrier at 98.00 the figure on the back of positive data releases, higher US yields and renewed optimism on the US-China trade war.

In fact, trade concerns look somewhat alleviated after both parties agreed to resume talks at some point in the near future. The news propped up the rebound in yields of the US 10-year benchmark back to levels above the key 1.5%.

In addition, positive results in today’s docket also gave extra steam to the buck after flash Q2 GDP came in at 2.0%, advanced GDP Price Index is seen rising 2.5% QoQ and the trade deficit shrunk to $72.34 billion during July.

What to look for around USD

The inversion of the yield curve in combination with trade headlines keep driving the mood in the Greenback amidst concerns of an upcoming recession in the US economy at some point in the next couple of years.

In the meantime, the solid labour market, strong consumer confidence and positive GDP readings appears to contradict this view for the time being, while inflation is seeing regaining upside traction in the near term.

Powell recently reiterated that the Fed ‘will act as appropriate to sustain the expansion’, leaving the door open for probable rate cuts at the September/October meetings at his speech at the Jackson Hole Symposium, although he did not unveil any reaction function regarding the interest rate path for the upcoming months.

US Dollar Index technical analysis

At the moment, the pair is gaining 0.20% at 98.39 and faces the next hurdle at 98.45 (high Aug.23) seconded by 98.93 (2019 high Aug.1) and then 99.89 (monthly high May 11 2017). On the other hand, a breach of 97.17 (low Aug.23) would aim for 97.02 (200-day SMA) and finally 96.67 (low Jul.18).

Disclaimer

This article was provided by OctaFX. It should NOT substitute for professional marketing consulting. Forex margin trading involves substantial risks. Forex margin trading exposes participants to risks including, but not limited to, changes in political conditions, economic factors, and other factors. All of which may substantially affect the price or availability of one or more foreign currencies.

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