US Dollar Index looks for direction around 91.80


  • DXY alternates gains with losses around 91.80.
  • US 10-year yields stay side-lined above the 1.50% level.
  • The Dallas Fed Index, Fedspeak come next in the docket.

The greenback starts the week on a choppy fashion and motivates the US Dollar Index (DXY) to trade without clear direction in the 91.80 region.

US Dollar Index looks to yields, data

The index remains within a consolidative mood on Monday, always against the backdrop of flat US yields and rising cautiousness ahead of key data releases later in the week.

Indeed, yields of the key US 10-year note manage to keep business above the 1.50% level so far, gaining a couple of bps from last week’s trading range.

In the meantime, investors are expected to keep tracking the debate between higher inflation, the Fed’s (still) dovish stance and prospects of tapering in the shorter-than-anticipated horizon. Additionally, recent results from the Consumer Sentiment (Friday) came in lower than forecast and fell in line with some loss of momentum in the US docket as of late, which could also be limiting the upside potential in the buck.

Data wise in the US calendar, the Dallas Fed Manufacturing Index will be the sole release on Monday. In addition, NY Fed J.Williams (permanent voter, centrist) and FOMC’s R.Quarles (permanent voter, centrist) are due to speak later in the NA session.

What to look for around USD

The dollar remains supported by the key 200-day SMA so far, always amidst the recent consolidation below the 92.00 yardstick and the muted performance of YS 10-year yields. The likeliness that the tapering talk could kick in before anyone had anticipated and a potential rate hike in H2 2022 fuelled the sharp bounce in the buck post-FOMC event to levels last seen in mid-April and at the same time introduced some uncertainty into the debate surrounding the extension of the “transient” inflation. The strong upside in DXY was also supported by higher yields in the shorter end of the curve, which in turn widened the spread differential vs. their German peers. In the meantime, further progress on the reopening of the economy, the vaccine rollout and results from key fundamentals remain key for the dollar’s price action/sentiment in the short-term horizon.

Key events in the US this week: House Price Index, Conference Board’s Consumer Confidence (Tuesday) – MBA Mortgage Applications, ADP Report, Pending Home Sales (Wednesday) – Initial Claim, ISM Manufacturing PMI, Markit’s June final Manufacturing PMI (Thursday) – Nonfarm Payrolls, Unemployment Rate, Balance of Trade, Factory Orders (Friday).

Eminent issues on the back boiler: Biden’s plans to support infrastructure and families, worth nearly $6 trillion. US-China trade conflict under the Biden’s administration. Tapering speculation vs. economic recovery. US real interest rates vs. Europe. Could US fiscal stimulus lead to overheating?

US Dollar Index relevant levels

Now, the index is losing 0.08% at 91.74 and faces the next support at 91.51 (weekly low Jun.23) followed by 91.13 (100-day SMA) and finally 89.53 (monthly low May 25). On the other hand, a breakout of 92.40 (monthly high Jun.18) would open the door to 92.46 (23.6% Fibo level of the 2020-2021 drop) and finally 93.43 (2021 high Mar.21).

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.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD under pressure as risk aversion leads the way

EUR/USD is consolidating early losses, bouncing just modestly from around the 1.1700 figure. The safe-haven dollar is in demand as the crisis around China's Evergrande deepens and a global slowdown is feared. Tensions toward the Fed decision and also Germany's elections are taking their toll too.

EUR/USD News

GBP/USD tumbles under 1.37, succumbing to dollar strength

GBP/USD is trading under 1.37, suffering from robust dollar demand. The financial woes of China's Evergrande threaten a drop in global demand. Soaring energy prices are also weighing on sentiment. The Fed and the BOE are eyed later this week.

GBP/USD News

XAU/USD remains vulnerable while below $1761

Gold price is making a minor recovery attempt from six-week lows of $1742 amid a retreat in the US Treasury yields, as the risk-off mood remains at full steam.

Gold News

Four reasons why XRP price will crash to $0.65

XRP price set up a swing high on August 15 and breached this local top to create a new one on September 6. However, the second attempt failed as the market experienced massive selling pressure the next day. 

Read more

Gamestop: The game just got upped with 500 new employees

GameStop announced 500 new employees for its customer care centre. Is this part of the new plan to do a Chewy? Nasdaq: GME stock has slid back as meme traders move on.

Read more

Forex MAJORS

Cryptocurrencies

Signatures