- Dollar Index (DXY) snapped five-day winning streak on Tuesday.
- But, a convincing break above 91.00 is still likely as the 10-year yield is attempting gains above 3 percent.
The dollar index, which tracks the value of the greenback against majors, is mildly bid around 90.84 in Asia and could scale the 91.00 mark in a convincing manner if the 10-year treasury yield reports big gains above 3 percent.
The DXY did clock a high of 91.08 yesterday, but closed on the back foot at 90.93, snapping the five-day winning streak. However, a big break above 91.00 is still on the cards as the 10-year yield is trading around 3 percent and looks north, as suggested by the bullish technical setup.
Kathy Lien from BK Asset Management says the yields are being driven higher by rising in inflation and rate hike expectations. At the beginning of this month, investors saw only a 79% chance of a hike in June but those odds sit at 93% today, adds Lien. So, the American dollar looks set to extend the rally.
That said, the greenback could depreciate, especially against safe havens like the Japanese Yen and the Swiss Franc if the equities turn risk-averse in response to rising bond yields.
Dollar Index Technical Levels
A break above 91.08 (previous day's high) would open the doors to 91.76 (Jan. 2 low), above which a major resistance is seen at 92.50 (Nov. 27 low). On the downside, breach of support at 90.60 (April 5 high) could yield a pullback to 90.45 (March 20 high) and 90.00 (psychological level).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
Recommended content
Editors’ Picks
EUR/USD bounces off lows, approaches 1.1550
EUR/USD continues to recover ground lost and now extends the rebound to the 1.1550 zone on Friday. Meanwhile, the US Dollar maintain its bullish bias intact in response to a significant flight to safety amid increasing geopolitical concerns, while positive consumer sentiment data also contribute to the daily uptick.
Gold keeps the trade above $3,400 on safe-haven demand
Gold prices maintain its upward trajectory on Friday, reaching its peak level since late April above the $3,400 mark per troy ounce. Furthermore, the precious metal draws increased safe-haven interest amid escalating tensions in the Middle East, triggered by Israel's military action against Iran.
GBP/USD trims losses, retargets 1.3600
After an earlier dip toward the 1.3520 area, GBP/USD has regained some composure, trading within sight of the key 1.3600 barrier as the week draws to a close. The pair remains under pressure on Friday, weighed down by renewed US Dollar strength amid rising risk aversion and a stronger-than-expected consumer confidence report.
Crypto Today: Bitcoin, Ethereum, XRP clamber for support amid escalating volatility on Israel-Iran tensions
The cryptocurrency market has been hit by a sudden wave of extreme volatility, triggering widespread declines as global markets react to tensions between Israel and Iran. Bitcoin is hovering at around $104,668 at the time of writing on Friday, following a reflex recovery from support tested at $102,513.
Week ahead – Markets brace for central bank barrage amid heightened uncertainty
Fed officials to stand pat as they await further clarity. A dovish BoJ could push rate hike expectations into 2026. Deflation fuels speculation about negative SNB rates. BoE may sound more dovish after disappointing UK data.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.