- The index returns to the mid-96.00s after recent weekly tops.
- Yields of the US 10-year note ease from daily highs to 2.73%.
- New Home Sales, Durable Goods Orders next on tap in the docket.
Measured by the US Dollar Index (DXY), the greenback is giving away part of Thursday’s advance and is returning to the 96.50/40 band during the European morning.
US Dollar Index weaker on risk-on trade, looks to data
After yesterday’s move to weekly highs near 96.70, the index lost some upside momentum and is now revisiting the mid-96.00s amidst a better tone in the riskp-associated complex.
In fact, the greenback managed to pick up extra steam in response to the dovish message from President Draghi at the ECB event on Thursday. However, the squeeze higher lacked of follow through around weekly tops, triggering the subsequent knee jerk.
Data wise today, Durable Goods Orders and New Home Sales are due later in the NA session.
What to look for around USD
The potential impact of the onging US shutdown on the economy appears to be gathering some traction among investors and carries the potential to dent the sentiment if it remains unsolved. In addition, the US-China trade spat is slowly returning to the markets’ radar ahead of next week’s meeting between US and Chinese officials.
US Dollar Index relevant levels
At the moment, the pair is losing 0.11% at 96.46 and faces immediate contention at 96.04 (low Jan.24) followed by 95.76 (50% Fibo of the September-December up move) and then 95.20 (200-day SMA). On the upside, a break above 96.68 (high Jan.24) would open the door to 96.79 (23.6% Fibo of the September-December up move) and finally 96.96 (2019 high Jan.2).
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