DXY Dollar Index climbs to 2-month highs near 103.70 ahead of data

• DXY Index extends bullish momentum to new highs.
• The dollar maintains its bullish trend awaiting the Jackson Hole meeting.
• The weekly MBA report, preliminary PMIs and housing data stand out on today’s economic calendar.

The Dollar extends its upward movement and reaches fresh two-month highs around 103.70 according to the DXY Dollar Index.

The DXY Index follows data and risk trends

DXY index extend Tuesday recovery and keeps the six-week positive streak well established so far, albeit this time amid some loss of momentum in US yields across the curve.

Meanwhile, the buying bias remains unchanged around the dollar ahead of the key Jackson Hole Symposium and President Powell’s speech, both events scheduled for the latter part of the week.

As for US data, weekly MBA mortgage applications, advanced manufacturing and services PMIs, and new home sales will be released later in the session.

What can we expect around the DXY index?

Buying interest seems safe and sound around the dollar and leads the DXY index to reach the 103.80 zone for the first time since early June.

Meanwhile, additional support for the dollar comes from the good health of the US economywhich seems to have revived the narrative around the Federal Reserve tightening stance.

On the other hand, the idea that the dollar could face headwinds in response to the Fed’s data-dependent stance in the current context of persistent disinflation and cooling of the labor market seems to be running out of steam lately.

Relevant DXY Index Levels

At time of writing, the DXY Index is up 0.06% on the day, trading at 103.65. A break of 103.79 (Aug 23 high) would open the door to 104.69 (May 31 high) and 105.88 (March 8 high). On the flip side, immediate support appears at 103.15 (200-day SMA), followed by 102.30 (55-day SMA) and 101.74 (August 4 low).