US Dollar rebounds towards 97, Fed's Beige Book eyed

After slipping to a fresh low since last Thursday at 96.80, the US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, started a mild recovery move before the Fed releases its Beige Book. As of writing, the index is at 96.95, still losing 0.3% on the day.

The greenback seems to be hurt by the weak market sentiment and dismal macro data from the United States. The major equity indexes started the day lower after ending the previous day with losses as the falling crude oil prices weigh on the energy shares and don't allow the risk appetite to awaken. Thus, the safer U.S. Treasury Bonds on Wednesday find demand, pushing their yields lower and weakening the greenback. 

Furthermore, today's data revealed that following a 0.9% drop in March, pending home sales in the U.S. fell 1.3% in April, missing the market consensus of +0.5%. On the other hand, Chicago Purchaser Managers' Index, which was released at 55.2 originally, was recently corrected to 59.4, allowing the greenback to recover some of its losses. Later in the session, Fed's monthly economic assessment report, Beige Book, will be released. An optimistic view of the U.S. economy could confirm a June rate hike, possibly supporting the greenback against its rivals.

• US: Fed’s Beige Book in focus today – BMO CM
• US Pending Home Sales: April shows another drop - Wells Fargo

Technical outlook

The index could face the immediate support at 96.80/70 (daily low/May 23 low) ahead of 95.90 (Nov. 11 low) and 95 (psychological level). On the upside, technical resistances are located at 97.50 (May 26 high), 98 (May 18 high/psychological level) and 98.75 (May 16 high).