- USD sell-off continues on fears of a hard landing.
- DXY approaching oversold conditions, according to the relative strength index.
The USD sell-off continues and apart from chart driven factors, there is very little out there that could lift the battered currency.
The dollar index (DXY), which tracks the value of the greenback against a basket of currencies, fell to 88.19 - the lowest level since Dec 2014. The 14-day relative strength index (RSI) is hovering at 31.00, meaning the greenback is close to being oversold.
That said, the fundamentals could continue to overshadow technicals. The post-US CPI decline in greenback indicates the investors are worried the rising price pressures may force Fed to tighten policy at a faster rate, thus leading to a hard landing.
Further, US tax reform is seen having a negative impact on growth and debt. Also, the traditional bond market correlations have broken down, hence further hardening of the treasury yields will likely have no positive impact on the USD.
Looking ahead - No first tier US data are due for release today, thus there is very little probability of a sudden bullish reversal in USD. As of writing, the dollar index (DXY) is trading at 88.20.
Dollar Index Technical Levels
88.22 - Support 1
88.15 - Support 2
88.02 - Support 3
88.35 - Pivot (Classic)
88.42 - Resistance 1
88.55 - Resistance 2
88.62 - Resistance 3
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.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.