US Dollar Index: trading above $91 as risk-off sentiment is easing

• The US Dollar is trading higher against yen, euro, pound and gold.

• The Non-Farm Payroll will be released on Friday at 12:30 GMT.

The US Dollar Index (DXY) is trading at around $90.27 up 0.30% on Tuesday so far as all global markets around the globe have re-opened after the Easter break. The next major event for the greenback is slated on Friday with the Non-Farm Payroll (NFP)

The DXY is on the front foot as the risk-off sentiment is easing with Wallstreet indices steadying after being in the red on Monday. The Japanese yen and gold are weakening, against the US Dollar, losing their safe-haven appeal. Also, the euro and the British pound are being hit by the buck strength, while antipodean currencies and the Canadian dollar are more resilient.  

US Dollar Index weekly chart

DXY decelerated from $92.31 to $88.43 in January 2018 before entering the current 88.50-90.55 trading range which has been the predominant theme in the first quarter in 2018. The DXY is consolidating between the 61.8% and 50% Fibonacci retracement from the 2014-2017 bum run. It is trading below its 50, 100 and 200-period simple moving average on the weekly chart. The 50-period simple moving average has crossed below the 200-period SMA. A close above the $91.05, previous swing low would open the gate to higher prices for bulls and $92.50 swing low becomes the next target. The bears need to break below $88.25 which is the low made on February 16, if they want to resume the bear trend; a break below the above-mentioned level would open the doors to $86 and $84 levels both previous demand level and big figures. The bears have not been very active in the last ten weeks as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicators are slightly picking up.

US Dollar Index daily chart

The DXY has found dynamic support at the 50-period simple moving average and is currently establishing a base at the $90 mark. In order to keep the bear momentum, the sellers need to keep the market below $90.45 resistance and swing high established in March. Further up, $90.94 swing high established on March, 1 is the cyclical high. If the bulls manage to break above the $91 psychological level and the 100-period simple moving average on the daily chart (currently at $91.23) stop losses will be triggered and the bulls should be able to bring the market up to $91.80 swing low back to the prices seen at the very start of 2018.