US Dollar Index drops to 2-week lows despite higher US yields

• US dollar weaker across the board despite tax reform bill. 
• US 10-year yield at higher since March offers no support.

The greenback was falling across the board on Wednesday and it was up only against the yen among majors. The slide took place despite higher US bond yields. 

The tax reform will likely pass the House of Representatives today. Then it will be ready for President Trump signature that according to recent reports might be delayed until January. With no further surprises seen, the bill is likely priced in the US dollar. 

US bond yields were rising for the fourth day in a row but offered no support to the US dollar. The 10-year yields reached today 2.49% for the first time since March. Usually higher yields boosted the greenback. Today it is rising only against the yen. 

The rally in the USD/JPY pair limited the downside in the Dollar Index. The DXY dropped recently to 92.70, the lowest level since December 1. As of writing it was trading at 92.80, consolidating below 92.95/93.00, a relevant technical level. It was headed toward the third decline in a row. 

Technical levels 

The technical outlook looked bearish for the DXY in the short—term. If it manages to rise back above 93.10 it would remove the downside pressure. 

To the downside, support levels might lie 92.70 (Dec 20 low), 92.50/55 (Nov 24 low) and 92.35/40 (Nov lows). On the flip side, now 93.00 is the immediate resistance followed by 93.25 (Dec 19 high) and 93.45/50.