US Dollar plummets to lows near 98.00, US ISM eyed

The greenback, in terms of the US Dollar Index, has accelerated its downside today to the area of session lows near the 98.00 handle.

US Dollar in multi-day lows

The index has quickly tumbled to fresh 2-week lows in the 98.00 neighbourhood on Tuesday, extending the drop from last week’s tops just above the key 99.00 handle, as upside momentum in the buck seems to have ebbed somewhat along with a profit taking bias.

Later in the session, USD will remain in centre stage in light of the release of October’s Manufacturing PMI tracked by Markit and the more relevant gauge from the Institute for Supply Management. Consensus expects the ISM Manufacturing to have improved slightly to 51.7.

In addition, CME Group’s FedWatch tool keeps signalling the probability of a Fed’s rate hike in December at above 72%, based on Fed Funds futures prices, keeping the case of a stronger greenback intact.

Furthermore, the latest CFTC report showed USD speculative net longs have climbed to levels last seen in the summer 2015 above 54K contracts during the week ended on October 25.

US Dollar relevant levels

The index is losing 0.20% at 98.11 facing the next support at 97.91 (20-day sma) followed by 95.814 (200-day sma) and finally 95.51 (6-month support line). On the upside, a breakout of 99.09 (high Oct.25) would aim for 99.95 (high Jan.21) and then 100.60 (high Dec.3).

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