US Dollar DXY Index Extends Fall Below 91.00

• The DXY index looks weak at the 90.70 region on Tuesday.
• The downward correction in US yields hurts the dollar.
• The NFIB index, JOLTs job openings data and a speech from the Fed stand out on today’s US economic calendar.

The US dollar DXY index, which measures the strength of the dollar against a basket of major currencies, extends weekly pullback below 91.00 region during the European session on Tuesday.

Weaker DXY US Dollar Index due to risk appetite and lower returns

After hitting new yearly highs in the 91.60 region at the end of last week, the DXY index has seen a downward correction that is now revisiting the 90.70 region, where the 21 and 55-day SMAs coincide along with the 2020-2021 trend line.

The downward movement in US yields, from recent highs around 1.20% reached on February 8, has also been contributing to the dollar’s downward movement, further exacerbated by the persistent improvement in risk appetite.

Regarding the US economic calendar, the NFIB index will be released today, followed by job openings from JOLTs and a speech from St. Louis Fed Governor J. Bullard on economics and politics. monetary.

What can we expect around the USD?

The dollar’s rise lost steam at the 91.60 area last week. Occasional bouts of strength in US yields remain the almost exclusive driver of dollar bullish attempts, helped by prospects for strong US growth versus other G-10 countries and the launch of vaccines. However, it is expected that the continuation of the uptrend of the dollar will remain somewhat contained amid the fragile prospects for the currency in the medium / long term, and always in the context of the current massive fiscal and monetary stimulus in the economy of The US, the Federal Reserve’s “lower for longer” stance and the prospects for a strong recovery in the global economy, which is expected to turn into additional appetite for riskier assets.

Key events this week in the US: Inflation Figures Measured By CPI / Core CPI, President Powell’s Address On “The State Of The US Labor Market” on Wednesday and the preliminary indicator of consumer sentiment for the month of February on Friday.

Eminent Background Topics: Trade conflict between the United States and China under the Biden administration. Reduction of speculation in the face of economic recovery. Real US interest rates versus Europe.

Relevant levels of the US dollar DXY index

At the time of writing, the DXY index is down 0.22% on the day, trading at 90.73. Initial support is at 90.57 (55-day SMA), followed by 90.04 (Jan 21 low) and 89.20 (Jan 6 low). On the upside, a breakout of 91.60 (Feb 5 high), would open the door to 91.78 (100-day SMA) and finally 92.46 (23.6% Fibonacci retracement of the 2020-2021 dip).