US Dollar Index looks for direction, still above 96.00
|- The index eases some ground from recent tops.
- Marginal volatility expected as US markets are closed today.
- Brexit developments likely to drive the sentiment today.
The US Dollar Index (DXY), which tracks the greenback vs. a basket of its main rivals, is struggling for direction albeit manages well to keep business above the key 96.00 the figure.
US Dollar focused on events across the pond
The index is looking to extend the so far 4-day rally at the beginning of the week, all against the backdrop of marginal volatility in the global markets due to the Martin Luther King holiday.
Last week’s positive note in the greenback was accompanied by the up move in yields of the key US 10-year note, which managed to approach the key 2.80% area, levels last visited in late December 2018.
What to look for around USD
The US shutdown is entering its fourth consecutive week and with it some concerns started to emerge regarding its impact on future GDP and employment figures. In the meantime, there is no fresh news from the US-China front, with Chinese officials expected to resume the trade talks on January 30-31 in Washington. On the longer run, investors continue to scrutinize the probable revision of the Fed’s rate path this year, always considering the prospects of a slowdown in domestic fundamentals and the reinforced ‘data-dependency’ from the Federal Reserve.
US Dollar Index relevant levels
At the moment, the pair is losing 0.05% at 96.31 and a break below 96.07 (100-day SMA) would open the door to 95.86 (10-day SMA) and then 95.76 (50% Fibo of the September-December up move). On the other hand, the next hurdle aligns at 96.39 (high Jan.18) seconded by 96.60 (55-day SMA) and finally 96.96 (2019 high Jan.2).
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