US Dollar Index clinches 6-week highs beyond 98.50

• DXY moves beyond the 98.50 level.
• The index records fresh multi-week highs.
• US 10-year yields climb to highs near 1.78%.

The greenback, in terms of the US Dollar Index (DXY), has accelerated the upside and printed fresh multi-week tops in the 98.50/55 band.

US Dollar Index in monthly peaks

The index has managed to attract further buying interest and moved to monthly tops in the 98.50/55 band, this considered a tough resistance and a key level for the continuation of the rally.

Once again, the persistent selling bias mainly around the euro and the Japanese yen has collaborated with the move up in the dollar, which extends the positive momentum for the second week in a row.

The bull run in the buck has been in tandem with an uptick in yields of the key US 10-year benchmark to daily highs just below 1.80% following the resumption of the activity in the US markets.

Absent releases in the US docket, the next significant event will be on Monday, when the ISM publishes its manufacturing gauge for the month of November. Additional key data out next week will be the ADP report, the ISM Non-Manufacturing, Factory Orders, November’s Non-farm Payrolls and the advanced Consumer Sentiment.

What to look for around USD

The index keeps the topside well and sound so far this week amidst usual rhetoric on the trade front and lack of fresh progress in the ‘Phase One’ deal. In the meantime, investors keep monitoring US fundamentals amidst the ‘wait-and-see’ stance from the Fed. On the US political scenario, the effervescence around President Trump’s impeachment process seems to be dissipating with the day. On the broader view, however, the outlook on the greenback still looks constructive on the back of a cautious Fed vs. the broad-based dovish stance from its G10 peers, the dollar’s safe haven appeal and the status of ‘global reserve currency’.

US Dollar Index relevant levels

At the moment, the pair is gaining 0.15% at 98.48 and a break above 98.54 (monthly high Nov.29) would open the door to 99.25 (high Oct.8) and then 99.67 (2019 high Oct.1). On the other hand, immediate contention emerges at 98.10 (100-day SMA) seconded by 97.68 (low Nov.18) and finally 97.61 (200-day SMA).