US Dollar off highs, back below 97.20

The greenback is now losing some upside momentum, sending the US Dollar Index to the 97.15/10 band.

US Dollar keeps 4-month levels

The index is posting gains for the third week in a row so far, backed by solid results from the US docket and fading momentum in the risk-associated universe. In view of Atlanta Fed’s GDPNow tool, the US real GDP is expected to growth 2.4% SAAR during Q2.

Recent strong data has somewhat put back on the table the idea that the Federal Reserve could resume its tightening cycle in the next months, lending extra support to USD. According to CME Group’s FedWatch tool, the probability of a 25 bp rate hike at the December meeting has climbed to nearly 40% from marginal levels just weeks ago.

US Dollar relevant levels

The index is gaining 0.08% at 97.14 and a breakout of 97.37 (high Jul.20) would aim for 98.58 (high Mar.1) and finally 99.95 (high Jan.21). On the flip side, the next support aligns at 96.58 (200-day sma) followed by 95.38 (low Jul.5) and then 95.17 (55-day sma).