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US Dollar Index Jumps to Weekly Highs Above 91.00

  • The DXY rises above 91.00.
  • US retail sales beat consensus in January.
  • The FOMC Minutes will be published later in the session.

Buying pressure around the dollar accelerates further and raises the US Dollar Index (DXY) to new highs above 91.00.

US Dollar Index at Multi-Day Highs

The index is navigating the area of ​​multi-day highs above 91.00 for the first time since Feb 8, adding to Tuesday’s gains and further extending the bounce from the 90.30 / 40 zone, where it is located. the 2020-2021 support line.

The strong rally in the dollar comes alongside the persistent rally in US 10-year yields, navigating the upper end of the recent range above 1.30% for the first time since February 2020.

Positive results on the US docket also helped the dollar after major retail sales expanded 5.3% monthly in January, while core sales also expanded above the forecast of 5.9%.

Other US data saw industrial production expanding 0.9% month-on-month, also in the first month of the year, capacity utilization up 75.6% and manufacturing production growing 1.0% from the previous month.

Later in the session comes the Trade Inventories, the NAHB Index, the FOMC Minutes and the weekly API report will close the daily calendar.

What to look for around USD

The corrective downside of the index appears to have recently found decent support near the 90.30 / 20 band. Dollar price action regained positive correlation with US yields, allowing it to rebound to 91.00. However, bullish attempts on the dollar should be short-lived, amid the fragile outlook for the currency in the medium / long term. Meanwhile, the current massive monetary / fiscal stimulus in the US economy, the Fed’s “longer down” stance and prospects for a strong recovery in the global economy are expected to continue to support improved sentiment. in the space associated with risk.

Relevant levels

At the moment, the index is gaining 0.50% to 90.97 and a breakout of 91.03 (weekly high of Feb 17) would open the door to 91.55 (100-day SMA) and finally to 91.60 (high of Feb 5, 2021) . On the other hand, initial support lines up at 90.22 (weekly low on Feb 16) followed by 90.04 (weekly low on Jan 21) and then 89.20 (low on Jan 6, 2021).

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