USD index

Choppy Action In The USD Index

Posted Monday, September 23, 2019 by
Shain Vernier • 1 min read

December USD Index futures continue to consolidate, just above the 98.000 psychological barrier. This pattern has been evident for more than two weeks ― can anything shake the USD Index out of its slumber?

Well, that may be a tough task. With no primary market movers scheduled until Thursday’s Q2 GDP report, we may be in for a period of extended muted trade facing the Greenback. However, there was some action in U.S. Treasuries today. Yields for the 3 and 6-Month T-Bills have fallen yet again, extending the year-long downtrend. Here is a quick look at the auction results from earlier:

Event                                                 Actual    Previous

3-Month T-Bill                                  1.905%      1.945%

6-Month T-Bill                                  1.86%          1.87%

So, yields are on the slide as investors favor safe-havens ahead of October. At this point, gold and bonds are gaining traction over equities.

USD Index Futures Give Back Early Gains

December USD Index futures are holding on to light gains, falling from intraday highs. As of press time (12:00 PM EST), rates are in bullish territory, just above downside support.

December USD Index Futures (DX), Daily Chart
December USD Index Futures (DX), Daily Chart

Here are the levels to watch for the remainder of the session:

  • Support(1): Daily SMA, 97.945
  • Support(2): Bollinger MP, 97.870

Overview: For now, it appears that consolidation is going to be the rule at least until Tuesday. Rates are flat, with the 98.000 attracting heavy two-way action. Unless we see a breaking news item or institutional traders commence balancing their end-of-month ledgers, the USD Index will very likely hang near 98.000.

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