US Dollar climbs to fresh tops above 89.50

• DXY tests highs above 89.50.
• USD remains bid in multi-day tops.
• US ISM non-manufacturing at 59.9 in January.

The US Dollar Index (DXY), which tracks the buck vs. its main rivals, has leapt to the area of multi-day peaks in the 89.55/60 band at the beginning of the week.

US Dollar bid after data

The index is picking up extra pace at the beginning of the week after US ISM non-manufacturing surprised markets to the upside, advancing to 59.9 for the month of January vs. expectations at 56.5 and December’s 56.0.

Previously, Markit’s services PMI came in at 53.3 for the month of January, matching December’s print albeit a tad lower than expectations at 53.5.

The better tone around the greenback has been bolstered by the rebound in yields of the US 10-year reference from lows in sub-2.83% levels to the current 2.85% neighbourhood.

DXY is now targeting last week’s peaks above 89.60, although strong resistance is expected to emerge around the 91.00 limestone (high Jan.18).

US Dollar relevant levels

As of writing the index is up 0.02% at 89.18 facing the next up barrier at 90.70 (high Jan.22) followed by 90.98 (high Jan.18) and then 92.64 (high Jan.9). On the flip side, a break below 88.55 (low Feb.2) would open the door to 88.42 (2018 low Jan.25) and finally 86.60 (weekly trend line off 72.70).