US dollar index extends gains above 97.50, to 7-month highs

The US Dollar Index, that tracks the USD versus its main competitors rose further during the American session supported by risk aversion. In Wall Street, US stocks were falling on average 1.40%. 

In the currency market, Greenback extended gains in the market, particularly against European currencies. The best performer was the yen. 

Breaking above July highs 

The recent rally pushed the price above July highs. The DXY peaked at 97.69, the highest since March 10, support by risk aversion, rising yield and an increase in Federal Reserve rate hike expectations during 2016. 

The index remains near the top, around 97.65, still above the barrier of July highs (97.57). A daily close around current levels could open the doors to more gains in the medium term from a technical perspective. On the fundamental side, on Wednesday the FOMC minutes will be released and could impact on the USD. 

DXY levels 

The index is advancing 0.80% at 97.65. To the upside, resistance levels could be seen at 97.70 (daily high), 98.00 (psychological) and 98.59 (Mar 3 high). On the downside, the initial support might now lie at 97.50, followed by 96.80 (downtrend line) and 96.25 (Sep 21 high).