US Dollar up smalls around 93.00

The greenback, tracked by the US Dollar Index (DXY), has bounced off recent lows in the 92.80 region and is clinging to its daily gains around the 93.00 handle.

US Dollar supported below 93.00

After Friday’s sharp drop following disappointing US CPI results, the index has so far managed to regain the critical 93.00 handle, although gains have been so far halted around the 93.10/15 band, where is located the key 200-hour sma.

Absent releases in the US docket today, the greenback’s price action should hinge on market sentiment while investors continue to adjust to the recent results from US inflation figures and prospects of further tightening by the Fed in the next months.

According to CME Group’s FedWatch tool, the probability of a rate hike by the Fed at the December meeting has retreated to just above 35% from around 45% a week ago, always based on Fed Funds futures prices.

Additionally, USD net shorts climbed to the highest level since January 2013 in the week ended on August 8, as per the latest CFTC report.

US Dollar relevant levels

The index is gaining 0.95% at 93.04 and a break above 93.51 (21-day sma) would target 93.78(high Aug.8) an route to for 94.11 (high Jul.26). On the flip side, the next support lines up at 92.83 (low Aug.11) seconded by 92.56 (low Aug.3) and finally 92.39 (2017 low Aug.2).