Ella 
U.S. dollar index extends upward momentum above 102
U.S. bond yields hover in early European trading
During the North American session, the US ADP employment report will be in focus
The U.S. dollar index maintained its rebound against a basket of currencies and rose again on Wednesday.
U.S. dollar index remains data-focused
The index continued its sharp rebound since its low around 99.50 in mid-July. It is expected to consolidate further after breaking through the key resistance of 102.00 recently. At the same time, U.S. yields across all maturities rose across the board, and risky assets fell back.
Indeed, the U.S. dollar index has closed lower in just three sessions since July lows in the 99.60/55 area, consistent with continued resilience in the U.S. economy and investors re-pricing further monetary policy decisions from the Fed and other major central banks .
Later in the North American session, the U.S. labor market will be in focus with the release of the ADP report for July, which measures U.S. private sector job creation. In addition, the MBA will routinely publish a weekly report on mortgage applications.
what to expect in dollars
The index continues to rebound and maintains its initial target at the 102.60 area, which is where the 55-day and 100-day SMAs lie.
Meanwhile, a fall in risk assets following the ECB decision appeared to lift the dollar, which faces additional headwinds from the Fed’s data-dependent stance amid persistent deflation and a cooling job market.
In addition, market expectations that July may be the last of the current rate hike cycle also temporarily weighed on the dollar.
Key US events this week: MBA mortgage applications, ADP employment data (Wednesday), initial jobless claims, services PMI final, ISM services index and factory orders (Thursday), non-farm payrolls, unemployment rate (Friday ).
Hot Issue: Ongoing debate over soft or hard landing for the US economy. Near-peak terminal rates and speculation of a rate cut in late 2023 or early 2024. Geopolitical implications for Russia and China. US-China trade conflict.
US Dollar Index Correlation Levels
Currently, the index is up 0.23% at 102.19, a break of 102.43 (weekly high Aug 1) would open the door to 103.54 (weekly high June 30) and eventually 103.65 (200-day SMA) . Short-term support, on the other hand, lies at 100.55 (weekly low Jul 27), then at 100.00 (psychological) and 99.57 (2023 low Jul 13).
