DailyFX Research: DXY Peeks Over the Wall, but Yet to Clear Key Level

Commentary, Forex, News
The US Dollar Index (DXY) has made strides towards establishing a bottom in recent days, but it’s still not quite there just yet. The key hurdle we discussed last week remains in play, even as DXY Index has peeked above 101.03 at the start of the week. Yet the fact remains, without a 4-hour close through 101.03 – and thereby negating the key reversal established intraday on January 30, the most recent swing high in the downtrend from the start of the year – it’s still to early to call the bottom in the DXY Index.
With that said, it appears that the US Dollar is starting to realign with the US 2-year yield, suggesting that market participants are shaking off the past two-weeks of divergence amid concerns that fiscal reform (infrastructure spending and tax cuts) would be pushed back to late-2017 or early-2018. With Fed Chair Janet Yellen set to testify today in front of the Senate Banking Panel (10 EST/15 GMT), there may be a catalyst on the horizon that could help push yields higher, and thus, carry the DXY Index through 101.03.

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