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  • DXY starts the week on a softer note near the 90.00 level.
  • The risk-on sentiment looks to resume the upside momentum.
  • The Dallas Fed index, the Chicago National Activity index next on tap.

The greenback, in terms of the US Dollar Index (DXY), starts the new week on the offered side and approaches the psychological support at the 90.00 mark.

US Dollar Index looks to risk trends, data

The index is down smalls near the 90.00 neighbourhood at the beginning of the week, fading somewhat Friday’s decent advance and resuming the downside following the rejection from 2021 highs in the 91.00 zone (January 18).

In the meantime, market participants continue to gauge President Biden’s recently announced plan to pump in $1.9 trillion under a new stimulus package vs. some opposition presented by Republican policymakers.

Also collaborating with the dollar’s soft note on Monday appears the consolidation in yields of the key US 10-year reference below the 1.10% mark.

In the US data space, the only releases scheduled for Monday will be the Dallas Fed Manufacturing Index and the Chicago Fed National Activity Index.

What to look for around USD

DXY met sellers in the area of 2021 tops around 91.00 (January 18), sparking a a corrective move to the vicinity of the 90.00 support afterwards. Occasional bullish attempts in the dollar, however, are expected to be short-live amidst the fragile outlook for the greenback in the short/medium-term, and always amidst the massive monetary/fiscal stimulus in the US economy, the “lower for longer” stance from the Federal Reserve and prospects of a strong recovery in the global economy.

US Dollar Index relevant levels

At the moment, the index is losing 0.12% at 90.12 and faces the next support at 89.20 (2021 low Jan.6) followed by 88.94 (monthly low March 2018) and the 88.25 (monthly low February 2018). On the other hand, a breakout of 91.01 (weekly high Dec.21) would open the door to 92.04 (100-day SMA) and finally 92.46 (23.6% Fibo of the 2020-2021 drop).