US Dollar pares gains, remains above 93 handle

After advancing to its highest level since August 23 at 93.42 in the early trading hours of the NA session, the US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, started to retrace its gains and was last seen at 93.16, still up 0.4% on the day.

Amid a lack of fresh catalysts, the index was able to extend its FOMC-led rally on Wednesday during the first half of the day and received an additional boost from the robust rebound seen in new orders for durable goods data from the U.S., which increased 1.7% on a monthly basis in August after recording a 6.8% contraction in July. However, the DXY struggled to preserve its bullish momentum and eased to the 93 handle as investors took some profits off the table ahead of US President Donald Trump's tax plan speech in Indiana. 

• Donald Trump’s speech Live Indianapolis - Tax Reform Rollout

Trump administration's inability to take decisive actions regarding the healthcare and the tax reform in the past had disappointed investors and triggered a sell-off in the greenback, which now forces participants to take a step back.

• USD: Positioning for tax reform? – Rabobank

On the other hand, in a speech today, St. Louis Fed President James Bullard adopted a dovish tone as he said that it was unlikely for inflation to rise appreciably in 2017 and further added that the current level of policy rate was appropriate given the recent macroeconomic data.

Technical outlook

The index could encounter the first technical support at 92.80 (50-DMA) ahead of 92 (Monday's low/psychological level) and 91.20 (Sep. 20 low). On the upside, resistances align at 93.40 (daily high), 94 (psychological level) and 94.75 (100-DMA).