US Dollar remains on the defensive, around 94.50

• DXY slips back to 94.50/40 early in Europe.
• US tax reform remains in centre stage.
• Advanced November U-mich index due later.

Measured by the US Dollar Index (DXY), the buck continues to grind lower at the end of the week, currently navigating the 94.50/40 band, the lower bound of the weekly range.

US Dollar attention to US politics, data

The index is extending the sideline theme so far this week and is looking to consolidate yesterday’s drop to the vicinity of the 94.50 region.

The increasing scepticism over the US tax reform continues to weigh on the buck in the second half of the week despite the current strong rebound in US yields. In fact, yields of the key US 10-year benchmark are currently testing multi-day tops in the boundaries of the 2.38% mark.

In the meantime, all eyes remain on the US political arena and particularly over the tax reform plans proposed by the Senate Republican and the House bill.

In the US data space, the advanced gauge of the US consumer sentiment measured by the Reuters/Michigan index for the current month is only due later.

US Dollar relevant levels

As of writing the index is losing 0.07% at 94.46 and a breakdown of 94.42 (low Nov.9) would open the door to 94.21 (21-day sma) and finally 94.03 (23.6% Fibo of the 2017 drop). On the upside, the immediate resistance aligns at 95.15 (high Nov.7) seconded by 95.90 (38.2% Fibo of the 2017 drop) and then 96.60 (200-day sma).