US Dollar resumes the upside, near 101.60 ahead of FOMC

The greenback – measured by the US Dollar Index (DXY) – is prolonging its upside bias on wed, now testing session highs in the 101.55/60 band.

US Dollar focus on FOMC minutes

The index is flirting with multi-week tops as it managed to leave behind the negative tone during the Asian trading hours, advancing for the fourth session in a row ahead of the key release of the FOMC minutes.

USD stays well underpinned by rising expectations of a rate hike by the Federal Reserve sooner rather than later, supportive Fedspeak and solid results from the US docket in past sessions.

In fact, Philly Fed P.Harker (voter, hawkish) left the door open for higher rates at the March meeting as long as data accompany. In the same line, Cleveland Fed L.Mester (2018 voter, hawkish) said she is comfortable with higher rates if the economy keeps the current direction, adding that inflation is closer to the Fed’s target.

Looking ahead, US Existing Home Sales are due along with the speech by FOMC’s J.Powell (permanent voter, neutral), all ahead of the key FOMC minutes.

On the positioning front, the speculative community have trimmed further its USD net longs in the week to February 14 as shown by the latest CFTC report, and could somewhat carrying the potential to remove some tailwinds from the up move.

US Dollar relevant levels

The index is gaining 0.11% at 101.56 facing the next resistance at 101.75 (high Feb.15) ahead of 101.95 (23.6% Fibo of the November-January up move) and finally 10296 (low Jan.11). On the flip side, a break below 100.99 (high Feb.20) would aim for 100.52 (20-day sma) and then 100.40 (low Feb.16).

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