- The index loses the grip and retreats to session lows near 94.60.
- Yields of the US 10-year note climbs to the vicinity of 2.90%.
- US flash Q2 GDP came in above estimates, Pending Home Sales disappoint.
The US Dollar Index (DXY), which gauges the buck vs. a basket of its main competitors, is returning to the negative territory around the 94.60 region.
US Dollar Index upside capped near 94.90
The index has managed to stage a recovery from multi-week lows in the vicinity of the 94.40 region on Tuesday, although the bullish attempt run our of steam just ahead of 94.90 earlier in the day.
The greenback found extra support in better-than-expected figures for another revision of US GDP, showing the economy is seen growing at an annualized 4.2% during the second quarter.
On the not-so-bright side, Pending Home Sales dropped for the seventh month in a row, this time contracting 0.7% MoM in July.
In the meantime, DXY has breached the critical support line off June’s low around 94.80, opening the door for a potential deeper pullback which should find the next relevant target at 94.08, late July low.
US Dollar relevant levels
As of writing the index is losing 0.13% at 94.60 and a break below 94.45 (low Aug.28) would open the door to 94.20 (38.2% Fibo of the 2017-2018 drop) and then 94.08 (low Jul.26). On the upside, the initial resistance emerges at 95.01 (55-day SMA) seconded by 95.42 (10-day SMA) and finally 95.71 (high Aug.23).
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