• The index gyrates without direction above the 107.00 mark.
• Markets seem to have entered the usual pre-NFP lull.
• The ADP report, ISM Services PMI will be in the limelight.

The greenback, in terms of the USD Index (DXY), alternates gains with losses above the 107.00 mark so far on Wednesday.

USD Index focuses on US data, Fedspeak

The index seems to have entered a consolidative phase around the area of 2023 tops beyond the 107.00 yardstick against the backdrop of further upside in US yields across the curve and a tepid improvement in the risk complex.

In the meantime, the intense upside bias in the index was further underpinned by hawkish comments from Fed rate-setters and firm speculation of an extra rate hike by the Federal Reserve before the end of the year.

Interesting session data-wise in the US will see the release of the weekly Mortgage Applications by MBA, the ADP report, final readings of the Services PMI, Factory Orders and the always-relevant ISM Services PMI.

What to look for around USD

The rally in the dollar appears to have met a decent resistance in the low-107.00s for the time being, as markets enter the usual consolidation ahead of the publication of the jobs report on Friday.

In the meantime, support for the dollar keeps coming from the good health of the US economy, which at the same time appears underpinned by the renewed tighter-for-longer stance narrative from the Federal Reserve.

Key events in the US this week: MBA Mortgage Applications, ADP Employment Change, Final Services PMI, ISM Services PMI, Factory Orders (Wednesday) – Initial Jobless Claims, Balance of Trade (Thursday) – Nonfarm Payrolls, Unemployment Rate, Consumer Credit Change (Friday).

Eminent issues on the back boiler: Persevering debate over a soft or hard landing for the US economy. Incipient speculation of rate cuts in early 2024. Geopolitical effervescence vs. Russia and China.

USD Index relevant levels

Now, the index is losing 0.02% at 107.05 and faces the next support at 105.65 (low September 29) ahead of 104.42 (weekly low September 11) and then 103.13 (200-day SMA). On the flip side, a breakout of 107.34 (2023 high October 3) would open the door to 107.99 (weekly high November 21 2022) and finally 110.99 (high November 10 2022).