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  • The index navigates the mid-96.00s ahead of the European open.
  • Yields of the US 10-year note rebound from 2.58%.
  • NAHB index only in the docket later today.

The greenback, in terms of the US Dollar Index (DXY), is looking for direction around the 96.50 region at the beginning of the week amidst alternating risk trends.

US Dollar Index focused on FOMC meeting

The index is meandering the lower bound of the recent range in the 96.50 region following the rejection from last week’s fresh 2019 tops in the 97.70/75 band.

The pick up in the sentiment around the risk-associated universe has been weighing on the buck during the past week, triggering the re-emergence of the selling bias.

However, further decline in the greenback appears to have met contention after the Trump-Xi meeting was pushed back to some point in April, somewhat reigniting uncertainty in the trade front.

Later in the day, the NAHB index is only due for release ahead of Factory Orders due tomorrow and the key FOMC meeting on Wednesday.

What to look for around USD

The optimism around a positive outcome in the US-China trade front faded somewhat in past days, although investors seem hopeful of a final agreement at the end of the day. On another front, US inflation seems to be losing some traction while activity remains strong, adding to the ongoing debate on whether the Fed should re-assess its next steps of its monetary policy, particularly regarding rate hikes. The occasional resumption of the upside in the buck, however, carries the potential to spark fresh bouts of criticism from President Trump to both the Fed’s policy and the level of the currency.

US Dollar Index relevant levels

At the moment, the pair is gaining 0.01% at 96.50 facing the resistance at 96.65 (10-day SMA) seconded by 96.88 (10-day SMA) and finally 97.71 (2019 high Mar.7). On the flip side, a breach of 96.39 (low Mar.13) would open the door to 96.34 (55-day SMA) and then 95.82 (low Feb.28).