No relief in sight? Dollar Index hits three-year low

  • 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.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

AUD/USD holds higher ground above 0.7300

AUD/USD extends gains above 0.7300 amid fresh US dollar selling across the board, as the market sentiment remains mixed starting out a fresh week.  PBOC's status-quo and the rally in copper prices bode well for the aussie. 


USD/JPY extends losses below 104.50 amid risk-aversion

USD/JPY resumes its decline towards 104.00 amid risk-off action in the Asian equities and broad dollar weakness. Markets in Tokyo are off for Respect-for-the-Aged Day, Focus shifts to the Fed Chair Powell's speech. 


Gold due for a breakout, according to key indicator

Gold's multi-week consolidation in a narrowing price range could end with a bullish breakout, as a widely-tracked daily chart indicator is about to turn bullish. The yellow metal has carved out a descending triangle pattern over the past four weeks.

Gold News

The week ahead: Central bankers’ chance to explain themselves

Global equities took another hit at the end of last week, and as we start a fresh week there is some concern that volatility could be creeping back into the markets and that tech has lost some of its lustre, along with gold, which also ended the week lower. 

Read more

WTI buyers attack $41.00 amid US-Iran tension, escalating virus woes

WTI remains heavy below 50-day SMA, drops from $41.18 to begin the week. The energy benchmark keeps trailing 50-day SMA for over two weeks while taking clues from the US-Iran tussle and the coronavirus (COVID-19) headlines. Hopes of further stimulus, China’s optimism favor energy bulls.

Oil News