US Dollar Index up marginally on Independence Day

On a quiet session for financial markets, the US dollar continued its recovery after last week slide. US markets are closed for Independence Day while European markets dropped for the fifth time out of the last six sessions. The North Korea situation was the focus of the day. On Wednesday, the Federal Reserve will release the minutes of the latest FOMC meeting. 

DXY rises, unable to hold above 96.00

The US Dollar Index reached 96.04, the strongest since Wednesday. If failed to hold above 96.00 and it was about to end the day hovering around 95.95. It is the third gain in a row as the index continues to recover from 9-month lows. 

In the currency market, the Loonie was the best performer con Tuesday amid rising crude oil price, PMI manufacturing data and growing expectations about a rate hike from the Bank of Canada. USD/CAD tumbled to 1.2910, the lowest since September. 

The Australian dollar was the worst affected by the tone of the Reserve Bank of Australia that left interest rate unchanged at 1.50% as expected but maintain its current tone. AUD/USD dropped to 6-day lows at 0.7590. 

Technical levels 

To the upside, immediate resistance for the US Dollar Index is seen at 96.05 (Jul 4 high), followed by 96.30 (10-day moving average) and then 96.65/70 (20-day moving average). On the opposite direction, support might lie at 95.75 (Jul 4 low), 95.50 (Jun 30 high) and 95.15/20 (2017 low).