- DXY rally now flirts with 100.50 midweek region.
- US yields rise again after Tuesday’s correction.
The US Dollar Index (DXY), which measures the dollar against its main competitors, continues to push higher and trades near the 100.50 region on Wednesday, hitting new 23-month highs.
US dollar index at levels last seen in May 2020
The index extends the positive streak for the tenth consecutive session on Wednesday and navigates an area last seen in May 2020 around 100.50, always supported by the firmer expectations of a stricter normalization by the Federal Reserve in the next few months.
On the latter, Richmond Fed President Thomas Barkin advocated a faster move to neutral rates, while St. Louis Fed’s James Bullard suggested neutral rates appear insufficient to reduce inflation. .
Meanwhile, in US markets, yields rose again after falling on Tuesday after US inflation figures rose at the fastest pace since 1981 in March. Despite the rebound in consumer prices, investors seem to be starting to sense that inflationary pressures may be losing some traction and the ceiling may be near.
DXY Technical Levels
At time of writing, the index is up 0.19% at 100.50 and a break above 100.55 (monthly high of May 14, 2020) would point to 100.86 (April 24, 2020 ceiling) and finally to 100.93 (monthly maximum of April 11, 2020).
On the downside, initial support appears at 97.68 (weekly low of March 30) followed by 96.94 (100-day SMA) and then 95.67 (weekly low Feb 16).
Source: Fx Street
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