Dollar Index: Hitting key resistance level

So what is driving the buck?

1, Technical driver: last week’s close above 81.65 – the 200-day sma – was a medium-term bullish development for the greenback.

2, A reduction in Syrian fears has boosted the USD, particularly against the safe havens of the yen and the CHF, which have helped the dollar index extend gains on Monday.

2, Is the dollar trading as a growth currency once again? It has moved higher along with European equities today, following on from a similar pattern at the end of last week when it also followed US equities higher.

Opportunities in the dollar:

The dollar has got off to a flying start in a week that is packed full of fundamental event risks including non-farm payrolls on Friday that could determine the timing of Fed tapering.

The medium-term direction of the dollar will be determined by the outcome of the August payrolls report in our view, thus set your clocks for 1330 BST on Friday. A weak number could weigh heavily on the greenback, while a 200k + number could give the greenback a further boost.

But what about between now and payrolls?

From a fundamental perspective there is plenty of other economic data to keep the market occupied including ISM manufacturing and non-manufacturing, which are released on Tuesday and Thursday. The market is looking for a slight moderation in both surveys; however they are expected to remain elevated. Any positive surprises could be good news for dollar bulls in the short term.

Read More: www.fxstreet.com/analysis/indices-insider/2013/09/02/04/