US Dollar Index on the defensive, finds support near 96.40

  • The index trades in the negative ground as risk-on trade prevails.
  • Yields of the US-10 year note test daily highs near 2.88%.
  • US Philly Fed index next of relevance seconded by housing sector figures.

The greenback, in terms of the US Dollar Index (DXY), has retreated from yesterday’s YTD tops in the 97.00 neighbourhood although it appears to have found some decent support in the 96.40 zone.

US Dollar Index looks to risk trends, data

The index tested lows in the 96.40 region earlier in the session and is now looking to attempt a recovery to the 96.55/60 band amidst some selling pressure hovering over the Chinese Yuan.

In fact, the buck has faded part of yesterday’s up move to multi-month peaks in the 97.00 area in response to a renewed pick up in the risk-on sentiment. Furthermore, the risk-associated universe is now seeing some light following news citing the Chinese Vice Commerce Minister will visit the US later in the month in order to resume trade talks.

In the US data space, the regional manufacturing gauge elaborated by the Philly Fed will be the salient event later in the NA session. Additionally, Initial Claims are also due along with Housing Starts and Building Permits.

US Dollar Index relevant levels

As of writing the index is down 0.14% at 96.59 and faces immediate contention at 95.78 (10-day SMA) seconded by 95.19 (21-day SMA) and finally 94.08 (low Jul.26). On the upside, a break above 96.98 (2018 high Aug.15) would open the door to 97.00 (psychological level) and then 97.87 (61.8% Fibo of the 2017-2018 drop).


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