US Dollar drops further from Friday’s highs
- DXY drops further, posting modest losses.
- USD affected by lower US yields.
The US Dollar Index dropped to 93.60 reaching the lowest since last Thursday. The greenback lost momentum across the board on a quiet US session.
Retreating from 94.00
On Friday, the DXY peaked at 94.02, the strongest level since November 22. It was rejected from that level and from near a downtrend line. During Friday’s US session started to decline and continued today. Recently the index bottomed at 93.60 and as of writing, was trading at 93.68, down 0.23% for the day, moving away from lows. The US dollar was affected by a decline in US yields. The 10-year fell from 2.38% to 2.35%.
Market participants are awaiting the FOMC decision (Wednesday). A rate hike of 25bp is widely expected. The statement, the “dot plot” rate projections and Yellen’s press conference will also be important for markets and the USD.
To the upside, resistance levels might lie at 93.85 (daily high), 94.00/05 (Dec 8 high) and 94.25 (Nov 02 & 03 low). On the flip side, support could be seen at 93.60 (Dec 11 low), 93.40/45 (Nov 30 high) and 93.25 (Nov 15 low).