US Dollar Index parked around 98.30 ahead of ISM

• DXY holds on around 98.30 on Monday.
• Yields of the US 10-year note surpass 1.81%.
• US ISM Manufacturing due later in the day.

The greenback, when tracked by the US Dollar Index (DXY), is alternating gains with losses around the 98.30 region at the beginning of the week.

US Dollar Index focused on weekly data

The index is looking to extend the positive momentum seen in the last couple of weeks, although a convincing breakout of the 98.50 level still remains elusive.

In the meantime, the US-China trade front appears somewhat calm and the persistent lack of significant headlines, particularly around the ‘Phase One’ deal looks surprising to say the least. Latest news, however, noted that China is pushing for the rollover of all existing tariffs as part of the deal.

It will be a very interesting week for the buck data wise, as the ISM Manufacturing is due later today seconded by the final print of the Markit’s manufacturing PMI. Later in the week, the ADP report and the ISM Non-manufacturing are expected on Wednesday, usual weekly Claims and Factory Orders on Thursday and Non-farm Payrolls for the month of November will be published on Friday.

What to look for around USD

DXY manages well to keep business in the upper end of the recent range so far amidst a steady bid note. Further out, investors are expected to keep monitoring developments from the US-China trade front as well as US fundamentals, all against the backdrop of the ‘wait-and-see’ stance from the Fed. 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 ‘good shape’ of the US economy, the dollar’s safe haven appeal and its status of ‘global reserve currency’.

US Dollar Index relevant levels

At the moment, the pair is advancing 0.04% at 98.32 and a breakout of 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 flip side, immediate contention emerges at 98.12 (100-day SMA) seconded by 97.68 (low Nov.18) and finally 97.62 (200-day SMA).