US Dollar retreats to lows near 94.70 ahead of ADP, GDP

• The index recedes from recent tops beyond the 95.00 handle.
• US 10-year yields rebound to highs above the 2.86% level.
• US ADP report, another revision of Q1 GDP next of relevance.

The greenback, in terms of the US Dollar Index (DXY), has abandoned the area of recent multi-month tops and returns to the 94.70/65 band.

US Dollar looks to data

The index is retracing part of yesterday’s significant advance to fresh YTD tops in levels just above the critical 95.00 barrier amidst some signs of life in the risk-associated space and a rebound in yields of the US 10-year note.

In fact, following the recent sharp correction lower, yields in the US money markets are today staging quite a moderate rebound to the 2.86% neighbourhood, lending support to the upside in USD/JPY and in turn fuelling the decline in DXY.

In the US data space, another revision of Q1 GDP figures are due next along with the ADP employment report for the month of May, all preceding Friday’s key Non-farm Payrolls figures.

US Dollar relevant levels

As of writing the index is losing 0.25% at 94.62 and a breakdown of 94.01 (10-day sma) would target 93.64 (23.6% Fibo of the April-June up move) en route to 93.37 (21-day sma). On the upside, the next up barrier aligns at 95.01 (2018 high May 29) followed by 95.15 (monthly highs Oct/Nov. 2017) and finally 96.51 (high Jul.4 2017).