US Dollar Index down smalls near 95.00, eyes on ADP, ISM

• The index holds on to the 95.00 handle ahead of data.
• Yields of the US 10-year note linger over the 2.90% area.
• US ADP report coming in next ahead of ISM non-manufacturing.

The greenback, in terms of the US Dollar Index (DXY), is trading slightly on the defensive in the second half of the week, although the 95.00 handle appears to be holding well so far.

US Dollar Index looks to data

The index gave away yesterday’s advance to fresh tops near 95.80 as jitters around the EM FX space accelerated. In fact, latest GDP figures in South Africa noted the country entered into recession, triggering a sharp depreciation of the Rand and motivating concerns over its peers to re-surface.

In the meantime, concerns on the US-China trade front and the still unresolved issue between US, Canada and Mexico are poised to keep occasional dips in the buck as shallow for the time being.

Looking ahead, the ADP report should give markets an idea of the upcoming Non-farm Payrolls expected tomorrow. In addition, weekly Initial Claims are due seconded by Factory Orders, Durable Goods Orders and the more relevant ISM non-manufacturing.

US Dollar Index relevant levels

As of writing the index is losing 0.03% at 95.11 facing the next support at 94.45 (low Aug.28) seconded by 94.20 (38.2% Fibo of the 2017-2018 drop) and then 94.08 (low Jul.26). On the upside, a breakout of 96.04 (50% Fibo of the 2017-2018 drop) would open the door for 96.96 (2018 high Aug.15) and finally 97.87 (61.8% Fibo of the 2017-2018 drop).