The greenback, in terms of the US Dollar Index (DXY), keeps pushing higher on Wednesday, now testing fresh daily highs above the 99.00 handle.
US Dollar bid ahead of FOMC
The index has retaken the critical 99.00 handle following an upbeat result from the ISM Non-manufacturing, rising above forecasts to 57.5 for the month of April vs. 55.2 recorded in March.
The renewed bid tone around USD found further grip in rising speculations on a Fed hike at the June meeting, with the probability of such event staying above 67% according to CME Group’s FedWatch tool and based on Fed Funds futures prices.
Later in the session, the FOMC is expected to keep its monetary status quo unchanged at today’s meeting, although the Committee is seen delivering a somewhat hawkish message, mainly focused on the strength of the labour market and the potential timing of the reduction of the Fed’s balance sheet.
DXY, in the meantime, keeps gravitating around the critical 12-month support/resistance line in the 99.00 neighbourhood, at least putting further distance from last week’s 2017 lows in the mid-98.00s.
US Dollar relevant levels
The index is gaining 0.21% at 98.99 facing the next hurdle at 99.07 (200-day sma) ahead of 99.21 (high Apr.27) and finally 99.59 (38.2% Fibo of 101.27-98.56). On the flip side, a break below 98.58 (low Apr.28) would open the door to 98.56 (2017 low Apr.25) and then 95.91 (low Nov.9 2016).