Amid sliding bond yields, the USD Index has slumped to 2-week lows at 92.514. The DXY has failed to capitalize on Friday’s stellar jobs report, and the IMF’s upbeat US economic outlook, with traders looking to cash in from the gains of the greenback by taking profits.
The yield on the 10-year US Treasury Note is down 1.03% this Tuesday, and this seems to be the main factor guiding trading sentiment on the US Dollar in the first trading day of the week after the Easter holidays.
Earlier in the day, the International Monetary Fund (IMF) had declared that it had raised its outlook for the growth of the US economy to 6.4%, which would mark the fastest growth rate in the US in nearly 40 years. However, the IMF indicated that this growth would still depend on the success of the coronavirus vaccination rollout.
The correction in the USD Index is now challenging the support at 92.500. If this support level fails to hold, then the pair could be in for a slump towards the 91.906 support. Below this level, the 91.50 and 91.261 support levels form additional targets for bears.
On the other hand, a recovery in the form of a bounce at the current support price could send the USD Index back towards the 92.803 resistance target, with 93.173 and 93.500 forming additional price barriers to the north.
