The USD Index is trading lower today, following the adoption of risk-on sentiment in the markets and disappointing ISM Manufacturing PMI numbers from the US.
The US ISM Manufacturing PMI number for April showed that the pace of business activity in the US manufacturing sector slowed as demand for inputs and raw materials outstripped their supply. The figure came in at 60.7, which was lower than the 64.7 seen in March 2021. The outcome also failed to meet the consensus figure of 65.0.
The reading ensured that the US Dollar remained firmly on offer when the market showed risky appetite, snapping up assets linked to global recovery and selling off safe-haven instruments.
The USD Index has lost 0.39% as of the time of writing.
Technical Outlook for USD Index
The USD Index is testing support at the 90.965 support level after being rejected at the channel’s lower border. A breakdown of this level opens the door for a move towards 90.503, with 90.228 and 89.741 serving as additional downside targets.
On the other hand, a bounce from the current support allows the price to retest 91.261, with the potential for a further move up to 91.500 or 92.009 depending heavily on market sentiment heading into employment data for Thursday and Friday.