- The greenback extends the downside today, testing levels below 92.40.
- US 10-year yields rebound to daily highs near 2.98%.
- US Retail Sales, Fedspeak of note ahead in the week.
The greenback, in terms of the US Dollar Index (DXY), is extending the decline at the beginning of the week to the 92.40/35 band, or multi-day lows.
US Dollar now looks to 92.00?
The index is retreating for the fourth session in a row on Monday, prolonging the rejection from last week’s new 2018 highs in the mid-93.00s to today’s lows near 92.30.
The downside in the buck has been accelerated after disappointing April’s US inflation figures failed to give further oxygen to the rally in USD last week. In addition, the recent withdrawal of the US from the Iran nuclear deal has been also collaborating with the profit taking sentiment around the buck.
The correction lower in DXY appears so far decoupled from the performance of yields of the US 10-year note, which remain sidelined above 2.95% for the time being.
News from the speculative community notes USD net shorts remained at the lowest level since March 20 on the week to May 8, as showed by the latest CFTC report.
Looking ahead, US Retail Sales (Tuesday) and the Philly Fed index (Thursday) will be the salient events in the calendar along with usual Fedspeak.
US Dollar relevant levels
As of writing the index is losing 0.23% at 92.36 and a break below 91.95 (200-day sma) would open the door to 91.70 (50% Fibo of 95.15-88.25) and finally 91.58 (21-day sma). On the other hand, the initial hurdle aligns at 92.64 (10-day sma) followed by 93.42 (2018 high May 8) and then 93.68 (78.6% Fibo of 95.15-88.25).
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