US Dollar under pressure around 89.40, Fedspeak eyed
- The greenback remains under pressure today, near lows around 89.40.
- US 10-year yields rebound from lows and test 2.84%.
- US/China trade war talk, Fedspeak to drive sentiment this week.
The greenback, measured by the US Dollar Index, has started the week on a negative footing and keeps navigating the lower end of the recent range in the 89.40/50 band.
US Dollar focused on Fedspeak
The index is down for the second session in a row on Monday amidst a pick up in the risk-on trade, month/quarter-end flows and increasing uncertainty following President Trump’s announcement of tariffs on Chinese imports.
The buck remains under pressure against the backdrop of sour sentiment and a mild bias towards the risk-associated space, as the VIX index is easing from its recent tops and yields of the US 10-year note have bounced off earlier lows near the key 2.80% handle.
On the technical front, DXY could see its leg lower accelerated in case of a convincing breach of the key 89.40 region – the bottom end of the sideline pattern -which has been holding on pretty well for the time being.
News from the speculative community saw investors holding a small net short position in the week to March 20, as per the latest CFTC report.
Event-wise today, speeches by R.Quarles, NY Fed W.Dudley (permanent voter, centrist) and Cleveland Fed L.Mester (voter, hawkish) should keep the attention around the buck in an otherwise empty docket.
US Dollar relevant levels
As of writing the index is down 0.11% at 89.42 facing the next support at 89.36 (low Mar.26) seconded by 89.07 (low Jan.26) and then 88.25 (2018 low Feb.16). On the other hand, a break above 89.85 (10-day sma) would aim for 90.44 (high Mar.20) and finally 90.57 (high Feb.8).
