The USD Index remains at 2-week lows as investors stand pat in anticipation of the FOMC minutes, due for release later today. Falling bond yields continue to be a bearish factor for the greenback this week, as traders wait to see if the Fed’s minutes will show a path to the US Dollar’s future.
The first quarter of 2021 saw a sharp rise in US bond yields, with the Fed deciding to adopt a more accommodating stance on the increase in the long-term real bond yields. Several FOMC board members indicated that they saw the increase in bond yields as a sign of growth, implying that it was not a negative thing that would warrant Fed action.
The DXY continues to trade flat on the day, basically remaining unchanged as the price narrows into an indecision doji candle.
Technical Levels to Watch
The breakdown of the 92.50 support appears to be on the verge of completion, with the price still a little distance away from the next support target at 91.906. If the FOMC minutes are bearish for the greenback, this price level would be the next available target. Below this level, 91.50 and 91.261 remain viable targets to the south.
On the other hand, bulls would need to see a break of the 31 March to re-establish a recovery on the USD Index. For this to happen, resistance barriers at 92.803 and 93.173 need to be uncapped, with the attainment of 93.805 being a tangible objective that makes the recovery move solid.
USD Index (DXY) Daily Chart