US Dollar tumbles to 2017 lows near 96.50

The selling bias around the greenback stays unabated so far this week, with the US Dollar Index – which tracks the buck vs. its main competitors – dropping to fresh YTD lows in the mid-96.00s.

US Dollar in 7-month lows

Monday’s optimism around the Dollar was ephemeral to the say the least. The index has resumed the downside today, fading yesterday’s bullish attempt to the vicinity of the key barrier at 97.00 the figure and trading in levels last seen in early November around 96.55/50.

The soft performance of yields in the US money markets are collaborating with the buck’s decline despite the probability of a rate hike by the Federal Reserve later this month remains well above 90% - 95.8% according to CME Group’s FedWatch tool based on Fed Funds futures prices.

USD is already trading in levels last seen in the wake of Trump’s win back in early November, opening the door for a potential visit to the next relevant support in the 95.90 region (low November 9 2016).

On the positioning front, USD speculative net longs have been decreasing for the last five weeks, now at the lowest levels since early October 2016 in the week to May 30, as per the latest CFTC report.

In the US data space, IBD/TIPP Economic Optimism Index is due along with JOLTs Job Openings for the month of April

US Dollar relevant levels

The index is retreating 0.26% at 96.52 facing the immediate support at 95.91 (low Nov.9 2016) and then 94.95 (low Sep.22 2016). On the upside, a breakout of 97.26 (high Jun.2) would open the door to 97.70 (high May 30) and then 97.58 (20-day sma).