USD index heavy, attacks 91.00 on monetary policy convergence
The US dollar, when measured by a basket of six major currencies, remains heavily offered and attacks the multi-month lows of 90.99 reached last September. The move lower in the greenback is an extension of the sell-off witnessed on Tuesday after the hawkish ECB minutes trigged an extensive rally in EUR/USD.
The bears flexed their muscles after the US PPI came in below expectations, which raised concerns of the consumer prices data due to be reported today. Meanwhile, the buck remains unperturbed by the surge in Treasury yields and record high Wall Street stocks, as the sentiment remains driven by the monetary policy convergence, with major central banks’ now looking to move away from the easy monetary policy this year.
Looking ahead, markets eagerly await the US CPI and retail sales data for the next direction while the FOMC member Rosengren’s speech will also hog the limelight.
Technical Levels to watch
The spot faces resistances at 91.50 (psychological levels), 91.78/84 (10 & 5-DMA) and 92.36 (2-week tops). To the downside, the supports are aligned at 90.99 (Sept 2017 lows), 90.80 (Jan 2015 lows) and 90.55 (classic S3).
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
