US Dollar parked around 97.30 amidst thin trade

The US Dollar Index – which gauges the buck vs. a basket of its main rivals – is trading largely unchanged on Monday around 97.30, always against the backdrop of marginal volatility as US markets stay closed due to the Memorial Day holiday.

US Dollar faces tough hurdle near 97.50

The index is looking to add further gains to the bull run seen in the second half of the week, although it appears that the buck should need a stronger catalyst to break above recent tops in the vicinity of 97.50 on a more sustainable basis.

USD has managed to rebound from last week’s YTD lows in the 96.70 region as dip-buyers re-emerged along with renewed hopes of a Fed’s move at its meeting next month. According to CME Group’s FedWatch tool, the probability of a rate hike in June stays at above 83% based on Fed Funds futures prices.

In the data space, the greenback faces a critical week in light of the releases of the ADP report and the ISM Manufacturing on Thursday and May’s Non-farm Payrolls on Friday.

However, the buck stays under pressure from the positioning front, as the speculative community continued to scale back its net longs positions during the week ended on May 23, this time to levels last seen in early October 2016, according to the latest CFTC report.

US Dollar relevant levels

The index is up 0.01% at 97.34 and a breakout of 97.47 (high May 26) would open the door to 97.97 (high May 18) and finally 98.20 (20-day sma). On the downside, the next support is located at 96.70 (2017 low May 23) followed by 95.91 (low Nov.9 2016) and then 94.95 (low Sep.22 2016).