- The index loses some upside momentum and returns to 96.30.
- Yields of the US 10-year note navigate daily lows near 2.74%.
- US Existing Home Sales dropped to 4.99M in December.
Tracked by the US Dollar Index (DXY), the greenback has now come under some selling pressure and returned to the 96.35/30 band, close to the 55-day SMA.
US Dollar Index offered post-US data
After a brief test of fresh 3-week tops in the proximity of 96.50 during early trade, USD-sellers have returned to the markets and are currently dragging the index to the vicinity of daily lows near 96.30, where sits the key 55-day SMA.
In addition, poor results from US housing sector are also collaborating with the leg lower in the buck. In fact, Existing Home Sales dropped to 499M units during December from November’s 533M units.
What to look for around USD
The US Federal government shutdown is already in its fourth consecutive week and investors have started to gauge its impact on GDP and employment figures during the first quarter. The US and China are expected to resume the trade talks at the end of the month in Washington. Until then, rumours and speculations are expected to run high and should have their saying in the buck’s price action. On the longer run, the potential revision of the Fed’s tightening plans for this year appears to have lost some traction among traders, although this is expected to return to the fore as a key market driver in the medium term.
US Dollar Index relevant levels
At the moment, the pair is gaining 0.02% at 96.34 facing the next resistance at 96.48 (high Jan.22) seconded by 96.61 (55-day SMA) and finally 96.96 (2019 high Jan.2). On the flip side, a breakdown of 96.12 (21-day SMA) would open the door to 95.92 (10-day SMA) and then 95.76 (50% Fibo of the September-December up move).
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