- The up move met resistance at 97.20 10-day SMA.
- US 10-year yields climbed above 2.50%.
- Import/Export Prices, U-Mich next on the docket.
The greenback is reversing part of yesterday’s advance and is now testing the 97.00 support and below when measured by the US Dollar Index (DXY).
US Dollar Index looks to data, yields
The index is navigating the area of 2-week lows in the 97.00 neighbourhood amidst the recovery in US-10year yields beyond 2.5% and the better tone in the riskier assets.
In fact, the greenback came under renewed selling pressure following the rejection from tops near 97.20 on Thursday despite auspicious prints from Producer Prices during last month and multi-decade lows in weekly Initial Claims.
In addition, White House economic adviser L.Kudlow said President Trump is considering H.Cain as well as S.Moore as a candidates for a seat at the Fed’s board of governors, all amidst some opposition from Republican senators.
Later in the NA session, Import/Export Prices for the month of March are due seconded by April’s advanced gauge of the Consumer Sentiment tracked by the U-Mich index.
What to look for around USD
DXY keeps tracking the broad risk appetite trends while headlines coming from the US-China/US-EU trade fronts also collaborate with the price action. The recent mixed views from the FOMC minutes reinforce the neutral stance of the Fed in the next months, although a rate raise has not been ruled out just yet. On the greenback’s positive side we find solid US fundamentals, its safe haven appeal, favourable yield spreads vs. its peers and the status of global reserve currency. This, plus the Fed’s neutral/bullish prospects of monetary policy vs. the dovish shift seen in its G10 peers are expected to keep occasional dips in the buck shallow for the time being.
US Dollar Index relevant levels
At the moment, the pair is losing 0.19% at 96.99 and faces initial support at 96.85 (low Apr.10) seconded by 96.62 (55-day SMA) and finally 95.74 (low Mar.20). On the other hand, a break above 97.52 (high Apr.2) would expose 97.71 (2019 high Mar.7) and finally 97.87 (monthly high Jun.20 2017).
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