US Dollar testing daily highs near 101.70

The US Dollar Index (DXY) – which tracks the buck vs. its main competitors – is extending the weekly upside to the 101.70 region, or session peaks.

US Dollar firmer post-US data

The index is now advancing for the second session in a row, leaving behind the initial negative tone and challenging daily highs in the 101.70 region.

USD met extra buying interest after US Initial Claims, the Philly Fed manufacturing index and Housing Starts have all surprised to the upside, lending extra legs to the buck.

In addition, and supporting today’s upside, ECB President Mario Draghi delivered an unexpected dovish message at today’s meeting, stressing that the uptrend in inflation remains unconvincing, while the central bank still remains far away from tapering its QE programme.

It is worth recalling that the US Dollar has been bolstered already by yesterday’s comments by Chairwoman Janet Yellen, saying that she expects rates to rise ‘a few times a year’ through 2019, adding at the same time that monetary support from the Federal Reserve could diminish as the central bank is approaching its employment and inflation goals.

US Dollar relevant levels

The index is gaining 0.28% at 101.59 facing the immediate resistance at 101.72 (high Jan.16) ahead of 102.10 (20-day sma) and then 102.96 (high Jan.11). On the flip side, a breakdown of 100.23 (low Jan.17) would open the door to 99.87 (low Dec.5) and finally 99.49 (low Dec.8).