The USD Index continued its upward march, albeit in muted fashion as the greenback continues to be buoyed by the activity in the US bond market. US 10-year Treasury yields is up 2.73% as of the time of writing, allowing the greenback to ignore downbeat economic data in the housing sector ahead of today’s FOMC decision.
Data from the US Census Bureau released a short while ago indicates that Housing Starts and Building Permits fell sharply in February. Housing Starts came in at 1.42million units, which was less than the consensus number of 1.56million units and also less than the previous number of 1.58m units. Building permits for new home constructions fell from 1.89m in January to 1.68m units in February; a figure which failed to meet the consensus of 1.74m units.
Despite the poor housing data, the USD Index is up 0.02%, choosing to ignore the poor data and looking up to the US bond yields and FOMC decision.
The USD Index (DXY) is challenging resistance at 91.906. Bulls need this resistance to give way, along with the channel’s upper border and the 92.50 resistance (a 4-month high) for the bullish reversal on the DXY to be cemented. Once the higher high above 92.50 is established, 92.803 and 93.173 become viable targets to the north.
On the other hand, a rejection at the current resistance and a resumption of the downside momentum puts 91.50 at risk, with 91.261 and 90.965 becoming the immediate targets to the south if 91.500 is taken out.
