FxWirePro: US Dollar Index Daily Outlook

US dollar index has shown a minor recovery of 97.44 and is currently trading around 97.38. The index is trading weak for the 4th consecutive week on weak US economic data such as US ISM manufacturing and retail sales which has increased hopes of a rate cut in the next Fed meeting. The probability of 25 bps cut in interest rates has increased to 93.5% vs 73.5% the previous week. US President Trump has given optimistic comments on a trade deal. He said that "the deal with China is coming along very well".

The US 10-year yield continues to trade higher and spread between US 10 and 2-year has widened to 18 bps from 12 bps.

On the lower side, near term support is around 97 and any violation below will drag the index till 96. The 97.40 will be acting as major resistance. Any close above targets 97.76/98/98.65.

It is good to sell on rallies around 97.40-45 with SL around 98 for the TP of 96.