US Dollar Index drops sharply, eyes lowest close since October
The USD continued to slide during the American session, despite the rise in US bond yields. The rally in EUR/USD led the decline of the greenback in the market, that during the last hours it even trimmed gains versus the yen and emerging market currencies.
The DXY dropped to 96.00, reaching the lowest intraday level in a week and is headed toward the lowest daily close since October.
Not even Federal Reserve official’s comments, about another rate hike and temporary weakness in inflation, stopped the slide in the value of the greenback. It accelerated the decline after falling below the relevant short-term support seen around 96.50 and resumed the long-term bearish move, that started in January from multi-year highs.
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The index is falling more than 1% on Tuesday, the worst performance in weeks. It failed to receive support from the bond market, where US yields bounced sharply to the upside. The 10-year rose back above 2.20%. Regarding economic data, the International Monetary Fund lowered the forecast of US growth. In Wall Street, equity prices area falling modestly. The Dow Jones is down 0.20% while the Nasdaq drops 1.25%.
Levels to watch
To the downside, the immediate support is the 96.00 zone followed by 95.75 and 95.60. On the upside, the first resistance is now the 96.45/50 area (Jun 6 & 7 low), followed by 96.75 and 96.90 (20-day moving average).
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
