US Dollar flirting with highs near 100.60

The greenback seems to have recovered the smile so far today, now lifting the US Dollar Index to the area of daily highs near 100.60.

US Dollar supported around 100.40

After two consecutive sessions with losses, the index is managing to retake the initiative at the end of the week and is currently looking to extend the rebound from weekly lows in the 100.40/30 band, where is located the 20-day sma.

USD has been quickly rejected from Wednesday’s tops around 101.70, as market participants cashed up the strong gains sustained by the hawkish tone from Yellen’s testimonies and supportive Fedpspeak.

In fact, recent comments by FOMC’s Lacker, Rosengren, Harker and Fischer have coincided in the need for higher rates, all expecting the Fed to hike rates three (or more) times during 2017.

Yellen’s testimony has opened the door wider for a March rate hike, with CME Group’s FedWatch tool now seeing the probability of higher rates in March at just above 22% after climbed to 31% earlier in the week.

US Dollar relevant levels

The index is gaining 0.19% at 100.64 facing the next resistance at 101.75 (high Feb.15) followed by 101.95 (23.6% Fibo of the November-January up move) and then 102.96 (high Jan.11). On the flip side, a break below 100.40 (low Feb.16) would aim for 100.34 (20-day sma) and then 100.03 (low Feb.8).