US Dollar keeps 101.00, FOMC on sight

The greenback, in terms of the US Dollar Index, is now extending its sideline theme amidst a generalized lack of volatility in the global markets.

US Dollar attention to Fed

The index is extending last week’s bearishness, briefly breaking below the 101.00 key support earlier in the session albeit managing to regain some ground afterwards.

USD has been once again rejected from tops in the 102.30 region, as market participants seem to be looking for extra signals of further tightening by the Federal Reserve in the next months. According to Reuters, the probability of a rate hike on Wednesday is nearly 92% based on Fed Funds futures prices.

Yields in the US money markets are also rebounding from daily lows, somewhat limiting the downside in the buck, with the 10-year reference hovering over the key 2.60% area.

Further data regarding the buck showed the speculative community added more contracts to the net long position in the week to March 7, taking them to 8-week tops along with rising Open Interest, all according to the latest CFTC report.

US Dollar relevant levels

The index is losing 0.22% at 101.16 facing the immediate support at 100.86 (low Mar.13) followed by 100.80 (100-day sma) and finally 100.64 (low Feb.24). On the other hand, a breakout of 101.21 (55-day sma) would open the door to 101.34 (20-day sma) and then 101.98 (high Mar.10).