US Dollar sell-off stalled at 89.70, back to treading waters

• Greenback was dumped during European trading despite lack of positive data from Europe.
• USD Index now finding support at 89.70, but technical outlook is neutral.

The US Dollar Index has been trading negatively for most of the day, but looks to have found support around the 89.70 mark now. The index, which measures the performance of the USD against a basket of currencies, fell during European trading from an intraday high at 90.24 down to 89.63, setting there today’s low in the early American session.

Riding a rather hawkish read of yesterday’s FOMC Minutes and rising US Yields, the greenback tried to rally back to the double-top February highs set at 90.60 two weeks ago, but the surge stalled short in the wake of the London session at 90.20. This is not a positive sign for USD bulls, which failed make new monthly highs despite rather subdued data from the Eurozone and the UK.

Fed officials William Dudley and Raphael Bostic’s speeches have been mostly ignored, and Robert Kaplan, set to speak at 20.30 GMT, doesn’t look like a market mover either. Markets seem to be tracking more closely US Stocks and Yields performance.

Technical levels

The technical outlook of the USD Index now looks less bullish in the short-term, shifting back to a neutral scenario. Now trading around 89.80, the index needs to break 90.15 and mostly 90.20 to get back to the bullish outlook shown earlier in the week. If so, the February double top at 90.58 would be back in play.

On the other hand, USD bears need to break below 89.60 to put any pressure on the bulls, and next target would be back at this week’s lows around 89. Breaking below there is a long shot, but doing that would make this year’s lows at 88.26 the next target.