US Dollar in a mixed mode again with no real big moves noticeable in any major pair.

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• US Dollar in a mixed mode again with no real big moves noticeable in any major pair.
• US debt-ceiling talks in stalemate while CME Fed futures are at 50% for another hike in July.
• US Dollar Index holding on to marginal gains as a new two-month high is in reach.

The US Dollar (USD) has paused its advance against most currencies on Wednesday after cold water got poured on the debt ceiling talks. Both sides departed on Tuesday night with no agreement, no new date set for further talks and no comments from both parties while the 1st of June is approaching fast. Markets will look for further info from US Treasury Secretary Yellen who is due to speak at 14:00 GMT.

On the macroeconomic data front, some fireworks are expected in the US session with Fed’s Waller due to speak and the FOMC Minutes from the latest meeting to be released at 18:00 GMT. Traders will want to see the voting behaviour and discussion punts that have been put on the table in the last meeting in order to assess if another rate hike in July is plausible. From the looks of the strong S&P Global Services PMI numbers released on Tuesday, one more rate hike looks possible.

The US Dollar Index (DXY) has taken out both the 55-day and the 100-day Simple Moving Averages (SMA), respectively, at 102.45 and 102.85 on the upside. A new high got printed briefly for the past two months, but contracts a touch on Wednesday with the impasse in Washington on the talks to sort out the debt ceiling.

On the upside, 105.75 (200-day SMA) still acts as the price target to hit, as the next upside key level at 104.00 (psychological, static level) acts as an intermediary element to cross the open space.

On the downside, 102.85 (100-day SMA) aligns as the first support level to confirm a change of trend. In the case that breaks down, watch how the DXY reacts at the 55-day SMA at 102.48 in order to assess any further downturn or upturn.

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