US Dollar Index off highs, still headed toward highest close in 14 years

The USD pulled back in the market during the American session but it was still higher against most of its competitors. The Dollar Index printed a new 14-year high at 103.59 and then pulled back to 103.05. It was about to end the day around 103.25. 

The greenback continued during most of the day with the rally that started on Monday but then lost momentum as US bonds yields moved off highs and with the Dow Jones unable to rise above 20,000. The stock index is up 0.35% headed toward another record close but still under the significant benchmark. 

The US dollar continues to receive support amid expectations of interest rate hikes during 2017. According to analysts from Westpac, Fed Futures have priced in a 100% chance of a rate hike by June. 

Economic news flow was quiet. On Wednesday there will be the out the first economic report of the week in the US with the existing home sales; and then Thursday, will be the busiest day with a new 3Q GDP reading, the durable goods orders report and personal income and spending data. 

DXY levels to watch 

To the upside, resistance might be seen at 103.55/60 (Dec 20 high),  104.00 (psychological) and 104.50 (Nov 2002 low). On the downside, support could be seen at 103.05 (Dec 20 American session low), 102.90 (Dec 20 low) and 102.45/50 (Dec 16 & 10 low).