US Dollar Index tumbles to 3-day lows around 96.10

  • The index meets extra downside mood and recedes to 96.15/10.
  • US 10-year yields off highs, back below 2.76%.
  • TIC Flows and the API report coming up next.

The greenback keeps the trade on the bearish side in the first half of the week and is now dragging the US Dollar Index (DXY) to the area of 3-day lows near 96.10.

US Dollar Index looks to trade, risk trends

The index is now losing ground for the third session in a row and is at the same time flirting with the 38.2% Fibo retracement of the September-December up move at 96.22.

In addition, yields of the key US 10-year reference are declining to daily lows in the vicinity of 2.75%, accompanying the moderate correction lower in the buck.

In the data space, TIC Flows are expected later in the session followed by the weekly report on US crude oil inventories by the American Petroleum Institute.

What to look for around USD

The US shutdown entered its fourth consecutive week so far amidst the continuation of the disagreement between Democrats and Republicans over the funding for Trump’s planned wall in the US-Mexican border. In addition, the US-China trade dispute has returned to the fore and is expected to drive the sentiment in the near term. In the longer run, the probability that the Fed could re-assess its rate path for the next months coupled with the performance of the US economy should remain in centre stage.

US Dollar Index relevant levels

At the moment, the pair is losing 0.17% at 96.13 and a breakdown of 96.10 (21-day SMA) would open the door to 96.02 (10-day SMA) and then 95.76 (50% Fibo of the September-December up move). On the other hand, the next resistance is located at 96.48 (high Jan.22) seconded by 96.61 (55-day SMA) and finally 96.96 (2019 high Jan.2).

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