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USD Index Declines Steeply; Approaching Key Support at 91.00

USDMXN Higher after Mexico Consumer Confidence beat Forecasts

The USD Index has weakened further on the day and has plunged 0.61% as the greenback remains on offer for the 5th out of 6 trading sessions. 

The weakness on the US Dollar comes as various board members of the FOMC made comments last week to the effect that the Fed would opt to hold rates at record lows for much longer until hard data would convince them to raise rates. 

This has dampened expectations of rates being raised in 2022 and has also led to a slight selloff in bond yields. The USD Index is now approaching key support at 91.00, but many analysts believe that the DXY could continue the decline in the coming days. 

Technical Levels to Watch

The steep intraday decline on the USD Index is now approaching 90.965 as the initial target. If this price level fails to hold, then bears could aim for 90.503, with additional downside targets seen at 90.228 and 89.741. 

On the other hand, a bounce at the 90.965 support allows bulls to get some respite, with some buying momentum required to send prices to 91.261. Above this level,91.50 and the 92.009 psychological resistance step in to become additional targets to the north. 

As long as the price remains below the 200-day moving average, the bearish sentiment persists.

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USD Index; Daily Chart

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