- The index reverses initial losses and approaches 97.00.
- Yields of the US 10-year note gyrating around 2.56%.
- US-China trade talks return to the fore.
The greenback, in terms of the US Dollar Index (DXY), is now looking to extend the bullish attempt to the 97.00 region after a negative performance during the Asian trading hours.
US Dollar Index now looks to trade, data
The index is now flirting with the key 21-day SMA in the 96.85/90 band following Friday’s sharp pullback, all amidst the broad-based mood supporting the riskier assets and rising hopes of a US-China deal.
In fact, US Secretary S.Mnuchin noted US-China trade talks appear to be advancing towards an agreement, lending extra oxygen to the prevailing upbeat atmosphere surrounding the risk-associated universe.
Data wise in the US calendar, the NY Empire State index for the current month is due seconded by TIC Flows and the speech by Chicago Fed C.Evans (voter, hawkish).
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 gaining 0.01% at 96.86 and a break above 97.09 (10-day SMA) would open the door to 97.52 (high Apr.2) and then 97.71 (2019 high Mar.7). On the flip side, the initial support is located at 96.75 (low Apr.12) seconded by 96.67 (55-day SMA) and finally 96.03 (200-day SMA).
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