US Dollar keeps the positive tone near 94.70, FOMC eyed

• US ISM manufacturing came in below expectations in October.
• DXY stays buoyant in the upper-94.00s.
• Attention on FOMC meeting.

The US Dollar Index (DXY) – which tracks the buck vs. a basket of its main rivals – stays within the positive territory so far on Wednesday around the 94.70/75 band.

US Dollar now looks to the Fed

The index lost some upside impetus after the ISM manufacturing disappointed investors today, coming in at 58.7 for the month of October vs. 59.5 initially forecasted and down from September’s 60.3.

Earlier in the session, however, both the ADP report showed the US private sector created more jobs than expected during October and Markit’s manufacturing PMI rose a tad above consensus for the same period.

DXY eased from earlier tops in tandem with yields of the US 10-year reference, which retreated towards the 2.35% in the wake of poor ISM figures after climbing as high as the boundaries of 2.40% post-ADP results.

Investors are now shifting their attention to the imminent FOMC gathering, with the broad consensus expecting an ‘on hold’ stance from the Federal Reserve. Further out, October’s non-farm payrolls will be the salient event later in the week, seconded by the ISM non-manufacturing and always interesting Fedspeak.

US Dollar relevant levels

As of writing the index is gaining 0.16% at 94.71 facing the next up barrier at 95.15 (high Oct.27) followed by 95.90 (38.2% Fibo of the 2017 drop) and then 96.79 (200-day sma). On the other hand, a breakdown of 94.27 (high Oct.6) would expose 94.03 (23.6% Fibo of the 2017 drop) and finally 93.48 (low Oct.26).