The USD Index (DXY) was only able to register marginal gains this Monday after falling yields on the long-term bonds offset any potential for gains from the upbeat ISM Manufacturing PMI report.
According to data from the Institute of Supply Management, economic activity in the US manufacturing sector grew in February, registering a value of 60.8. This was better than the projected figure of 58.7, which was also the actual number for January. The improvement in market conditions around manufacturing ought to have boosted the value of the US Dollar. However, falling bond yields have reduced demand by foreign capital for dollars in that space, thereby providing the data conflict that muted the response of the USD Index.
The DXY was trading 0.08% higher as of the time of writing.
Technical Outlook for USD Index
The USD Index is challenging the resistance at 90.965 but bullish momentum is weak and this resistance has held firm so far. The DXY needs additional momentum from the bulls to transcend this price barrier, as it aims for the ascending channel’s upper border. This move would have to take out resistance barriers at 91.50 and 91.906 if it is to materialize.
On the other hand, rejection and subsequent pullback at 90.965 could allow 90.503 to come into the mix as the initial downside target. 90.228 comes thereafter for bears, with sub-90 targets at 89.741 and 89.189 only coming into the picture if the ascending channel’s border gives way.
DXY Daily Chart