- The US dollar index extends its weekly gains, accumulating 1%.
- The rise in US bond yields supports the recent trend of the greenback.
- A break above the 4 hour 200-SMA could push the DXY towards 93.00.
The US dollar index, which measures the performance of the greenback against six major currencies, rallied for the third day in a row, last seen at 92.64, up 0.13%.
Over the past three days, the DXY has risen almost 1%. It mainly benefited from the rise in US bond yields. However, the benchmark 10-year rate is down two basis points (bps), standing at 1.355% at the time of writing.
4-hour DXY chart
Although the daily chart supports the bullish bias, zooming in on a shorter time frame depicts a brutal battle between the bulls and the bears. The greenback is trading near strong resistance at 92.78. This level has been tested without success, suggesting that the price is consolidating between the above mentioned level and the 200 Simple Moving Average (SMA) at 92.65.
A break above the 92.65-92.78 range could expose the next resistance at the August high at 93.18. Once this level is reached, the next supply level would be 93.72.
On the other hand, the failure of the 200-SMA could put downward pressure on the US dollar index. The first support would be the 50-SMA at 92.47. A breakout of the latter would push the DXY towards the September swing lows around 92.10.
The Relative Strength Index is at 64.53, pointing down, but still supporting a bullish bias.