Dollar Index off lows as US stocks recover and yields reverse

The US dollar trimmed losses across the board during the last hours. The greenback bottomed earlier today and then rebounded as equity prices erase losses and as US bond yields move off lows.

DXY rebounds from 2-year lows

The Dollar Index bottomed at 91.54, the lowest level since January 2015 and now is near 92.00, at 91.95 down 0.25% for the day. Despite the recovery it continues to move with a clear downside bias, still under pressure but not as weak as it was during European hours.

The recovery from the lows came amid a reversal in Wall Street. The Dow Jones opened with a decline of 100 points and now is up 0.05%. In the bond market, the 10-year yield bottomed at 2.08%, the lowest since November and at the moment, is back above 2.12%.

The improvement in the mood across financial markets also weakened the yen, favoring a recovery of USD/JPY that rose above 109.00, boosting the DXY further to the upside. The index remains close to session highs however still looking vulnerable. The yen and the Swiss franc trimmed gains but still remains the top performers of the day. Both jumped to the upside after the North Korea launched a missile over Japan.

DXY Technical levels

To the upside, resistance levels might be seen at 92.00 (psychological), 92.20 (daily high) and 92.50 (Aug 28 high). On the downside, support could be located at 91.75, 91.50/55 (daily low) and 90.75 (Dec 2015 high).