Dollar Index - 61.8% Fib hurdle intact, eyes Fed

• The USD index holds below 61.8% Fib R of Nov. slide at 94.14.
• Fed rate hike priced-in?

The Dollar Index (DXY) failed to hold above 94.14 (61.8% Fib R of Nov. slide) as the 10-year treasury yield retreated from the NY session high of 2.42 percent to 2.39 percent.

The 2-year yield shows the market has fully priced-in the 25 basis point rate hike. The 2-year yield, which mimics short-term interest rate/inflation expectations, has jumped close to 60 basis points since late September.

Hence, DXY may be finding it hard to break above the 61.8% Fib. Also, as Kathy Lien from BK Asset Management says, the dollar could fall if Yellen keeps guidance to a minimum and there are no major changes to the economic forecasts. Ahead of the Fed meeting, the Nov. CPI could yield minor moves in the greenback.

Dollar Index Technical Levels

The index was last seen trading around 94.02 levels. A move above 94.14 (61.8% Fib R) would shift attention to 94.52 (76.4% Fib R). A violation there would expose 95.15 (Nov. 6 high). On the other hand, a breakdown of support at 93.94 (5-day MA) could yield 93.58 (10-day MA) and 93.34 (100-day MA).