DXY inter-markets: not so ‘phenomenal’

The US Dollar Index – which gauges the buck vs. its main rivals – has come under further downside pressure today, quickly breaking below the critical support at 101.00 the figure in response to another poor performance from US yields.

In fact, yields in the US money markets are probing daily lows in spite of auspicious results from the US docket – including Consumer Confidence at 16-year high - with the sole exception of the second revision of the GDP for the fourth quarter (1.9% act. vs. 2.1% exp.).

Expectations of a Fed move at the March meeting continue to lose traction today, weighing on yields and thus encouraging the buck to test lower levels.

Looking ahead, the greenback’s price action appears to hinge almost exclusively on Trump’s announces and general stance. Today’s SOTU speech should prove to be a significant catalyst for the Dollar in the near term, as market participants seem to have shifted their perception of a rate hike in May as more appropriate (despite recent insistence from Fed-speakers to hike as soon as possible).

The immediate support for DXY stays in the 100.60 area, where are located recent lows and the 20-day sma, while the 100.40 region (mid-February lows and 100-day sma) emerges as the next support in case the downside intensifies. On the upside, the 101.70/75 band appear as the interim target.