US Dollar Index Dips From New Yearly High Around 95.40, Bulls Watch 96.00

• The US Dollar Index starts the week on the right foot, rising 0.25%.
• The 10-year US Treasury yield is up almost four basis points to 1,621%.
• DXY Technical Outlook: A breakout above 96.00 exposes the June 30, 2020 high at 97.80, followed by a test of 100.00.

The US Dollar Index, also known as DXY, which tracks the performance of the dollar against a basket of its peers, advanced 0.34%, standing at 95.42 during the American session at the time of writing this article. Since last Wednesday, the DXY had gained more than 1.55% trading as low as 94.00, until Monday’s session, when it reached a yearly high around 95.45.

Earlier in the Asian session, the DXY hovered around the psychological 95.00 level, undermined by falling US bond yields. Also, on Friday last week, the University of Michigan Consumer Sentiment Index fell to a 10-year low as consumers expressed concern about high prices. This would put pressure on the Federal Reserve, which in fact, this week will begin the reduction of its QE pandemic program by 15 billion dollars, which would end in June 2022.

At the time of writing, US bond yields are rising. The 10-year Treasury yield is up three and a half basis points, standing at 1.621%, acting as a tailwind for the dollar.

US Dollar Index (DXY) Price Forecast: Technical Outlook

The daily chart shows the DXY approaching the center line of the Pitchfork indicator around the 95.50-60 region. The daily moving averages (DMA) remain well below the current price action, sloping upward, supporting the bullish bias. Also, the Relative Strength Index (RSI) at 68 is above the 50 midline, it is aiming higher, suggesting that DXY has another lead before reaching overbought conditions.

A break above the midline of the Pitchfork channel would expose 96.00 as its first resistance area. A clear break from the latter would expose the June 30, 2020 high of 97.80, followed by the May 25, 2020 high at 99.97.

Technical levels