- The index faces renewed selling pressure below the 95.00 handle.
- Yields of the 10-year note climb to highs near 2.85%.
- DXY recedes further as risk-on sentiment gathers extra pace.
The greenback, in terms of the US Dollar Index (DXY), remains on the defensive at the beginning of the week and is now looking to extend the breakdown of the critical 95.00 support level.
US Dollar fragile on risk-on sentiment
The selling bias around the index is now quickly picking up extra pace, breaking below the 95.00 handle and flirting with the critical short-term resistance line and the top of the daily cloud. A break below this line could accelerate the downside to July’s low at 93.71.
The better mood in the riskier assets lifted stocks to fresh highs and is now propelling EUR/USD to new multi-week peaks near 1.1670.
In addition, the recent announcement of a NAFTA deal has added to the already optimistic mood in the risk-associated complex, all collaborating with the persistent decline in the buck.
US Dollar relevant levels
As of writing the index is losing 0.28% at 94.89 facing the immediate support at 94.84 (low Aug.27) followed by 94.08 (low Jul.26) and finally 93.71 (monthly low Jul.9). On the upside, a breakout of 95.53 (21-day SMA) would aim for 95.71 (high Aug.23) and then 95.84 (10-day SMA).
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