DXY inter-markets: poised for extra upside

The US Dollar Index – which tracks the greenback vs. its main rivals - is now trading on a firm fashion in the upper 98.00s, a tad lower than yesterday’s second test of tops above the 99.00 handle.

The solid momentum surrounding the buck has gathered extra traction after Trump was elected US President and remains the sole catalyst behind the pair’s deep correction.

Yields in the US money markets remain on the rise - with the 10-year benchmark surpassing 2.15%, levels last seen in early January - adding to USD strength while Fed Funds futures prices now point to a probability of a Fed’s rate hike in December at above 71%, completing the virtuous circle around the dollar.

USD has also found support on diminishing jitters around the US political scenario after ‘auspicious’ talks between President Obama and D.Trump on Thursday. The upbeat sentiment around the buck has been already boosted following news of potential fiscal stimulus via infrastructure plans and other measures oriented to spur growth.

On the technical side, DXY’s outlook remains constructive as long as the 6-month support line – today at 95.75 – underpins, reinforced at the same time by the key 200-day sma around 95.80. On the upside, there is not much in terms of resistance levels until 2016 tops just above the 100.00 mark seen in January.

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