US Dollar Index looks for direction below 96.00

• The index remains under pressure in sub-96.00 levels.
• Yields of the US 10-year note gyrate around 2.75%.
• Attention on ECB’s Draghi and BoE’s Carney.

Measured by the US Dollar Index (DXY), the greenback is extending Friday’s down move below the key 96.00 handle, so far meeting support in the 95.70/65 band.

US Dollar Index focused on risk trends

Following Friday’s sharp pullback, the index is now navigating the lower bound of the recent range, always under pressure against the backdrop of a positive mood in the risk-associated complex.

There are no data releases today in the US docket, while investors’ attention should shift towards the upcoming US-China trade talks and the FOMC meeting.

What to look for around USD

Some respite emerged around the buck after the partial US government shutdown ended on Friday. The shutdown lasted over a month and is considered the longest in US history. However, President Trump said another shutdown is ‘certainly an option’ as long as the deal to fund the border wall remains elusive. Market participants, in the meantime, are now focused on the upcoming US-China trade talks (Wednesday and Thursday) and the FOMC meeting (Wednesday), with the renewed ‘flexible and patient’ stance from the Fed in centre stage.

US Dollar Index relevant levels

At the moment, the pair is up 0.03% at 95.84 and faces immediate contention at 95.67 (low Jan.28) followed by 95.30 (61.8% Fibo of the September-December up move) and then 95.22 (200-day SMA). On the upside, a break above 96.01 (21-day SMA) would open the door to 96.22 (38.2% Fibo of the September-December up move) and finally 96.55 (55-day SMA).