Search ForexCrunch
  • The index clinched fresh multi-week tops earlier in the day.
  • US 10-year yields find support in the 3.05% area.
  • Markets wait for Chief J.Powell’s speech, due later in the session.

After climbing as high as the 95.75 area during early trade, the US Dollar Index (DXY) has now receded some ground and looks to consolidate in the mid-95.00s.

US Dollar Index now looks to Powell

The index reached new 6-week tops during the European morning in the 95.70/75 band, always backed by the persistent sell off in EUR/USD and the prevailing risk-off theme in the broader markets.

Jitters on the Italian fiscal front plus usual back and forth in Brexit headlines continued to sustain the solid demand for the buck while deteriorating further the sentiment in the risk-associated universe.

Amidst the ongoing optimism around the greenback, Fed’s Jerome Powell will speak later on prospects for inflation and unemployment. Consensus among investors, however, does not expect Powell to come up with anything different from the recently released statement following last week’s FOMC meeting.

US Dollar Index relevant levels

As of writing the index is gaining 0.18% at 95.46 facing the next hurdle at 95.74 (monthly high Oct.2) seconded by 96.04 (50% Fibo retracement of the 2017-2018 drop) and finally 96.98 (2018 high Aug.13). On the downside, a breach of 94.79 (21-day SMA) would aim for 93.81 (low Sep.17) and then 93.71 (monthly low Jul.9).