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US Dollar Index off tops, returns to the 102.00 area

  • DXY recedes from YTD peaks near the 103.00 mark.
  • Risk-on sentiment prevails in the global markets on Friday.
  • US Existing Home Sales, oil-rig count next on the docket.

The greenback, in terms of the US Dollar Index (DXY), is correcting lower after hitting fresh YTD highs in the boundaries of the 103.00 mark early on Friday.

US Dollar Index met resistance near 103.00

After climbing to levels last seen in January 2017 near 103.00 the figure, the index sparked a correction lower that is now seeing the 102.00 neighbourhood re-visited ahead of the opening bell in Euroland.

DXY moved to more than 3-year highs near the 103.00 mark early in the Asian session as traders continued to adjust to the recent wave of fresh easing measures in major central banks, while signs of funding stress around the buck appears to be losing momentum.

In the US docket, Existing Home Sales for the month of February will be the only release in the NA session seconded by the weekly oil rig count.

What to look for around USD

DXY rapidly left behind key up barriers amidst the ongoing rally although it met resistance near 103.00 so far. The sharp upside in the dollar has been sustained by firm demand on the back of funding concerns as of late, while easing monetary conditions by central banks other than the Fed also collaborated with the upbeat sentiment in the buck. In the meantime, markets’ focus remains on the developments from the COVID-19 and its impact on the global economy amidst (now) looser monetary policy conditions from the Fed and the rest of the major central banks.

US Dollar Index relevant levels

At the moment, the index is retreating 0.91% at 102.00 and faces the next support at 100.49 (78.6% Fibo of the 2017-2018 drop) followed by 99.91 (monthly high Feb.20) and then 98.18 (55-day SMA). On the flip side, a breakout of 102.99 (2020 high Mar.20) would open the door to 103.65 (monthly high December 2016) and finally 103.82 (monthly high January 2017).

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