US Dollar drops to lows near 92.30 ahead of ADP, FOMC

• The index loses some momentum around 92.30.
• US 10-year yields rebounds to the 2.99% area, session highs.
• US ADP report next on tap ahead of the FOMC meeting.

The US Dollar Index (DXY), which tracks the buck vs. a basket of its main rivals, is trading on the defensive on Wednesday in the 92.35/30 band.

US Dollar looks to data, FOMC

After clinching fresh multi-month tops near 92.50 on Tuesday, the index met some selling pressure and is now retreating to the 92.35/30 band amidst a sharp rebound in US yields.

In fact, yields of the key US 10-year note have regained attention and are now flirting with the 2.99% neighbourhood, or daily highs, after receding below 2.96% earlier in the week.

The greenback should remain in centre stage today in light of the publication of the ADP report (200K) and the FOMC meeting later in the day. Market consensus expects the Committee to refrain from moving on rates today, while another hike is seen at the June meeting.

US Dollar relevant levels

As of writing the index is losing 0.22% at 92.26 facing initial contention at 91.97 (200-day sma) seconded by 91.70 (50% Fibo of 95.15-88.25) and finally 91.29 (10-day sma). On the upside, a breakout of 92.55 (high May 1) would open the door to 92.64 (2018 high Jan.10) and then 93.68 (78.6% Fibo of 95.15-88.25).