US Dollar loses the grip near 89.60 ahead of US data, Fedspeak

• DXY started the week on the defensive dropping to the mid-89.00s.
• Yields of the US 10-year reference fell to the 2.85% area.
• USD vigilant on the upcoming semi-annual testimony by Chief J.Powell.

The greenback, in terms of the US Dollar Index, has started the week on a weak footing and is now looking to consolidate in the 89.50 region.

US Dollar attention to data, Powell

After last week’s strong advance, the index abandoned the 90.00 neighbourhood and has receded to the mid-89.00s following a pick up in the sentiment around the risk-associated space and the drop in yields in the US money markets.

In fact, the buck retreated after its rivals EUR, GBP and JPY are extending the positive momentum since overnight trading, while the positive performance of Asian stock markets also added to the downside.

Collaborating with the selling bias in the buck, yields of the key US 10-year benchmark dropped to the 2.85% area earlier in the session, some 10 bps lower than last week’s multi-year peaks.

furthermore around the Dollar, speculative net shorts were trimmed to the lowest level since January 16 in the week ended on February 20, as per the latest CFTC report.

Looking ahead, today’s US calendar includes the Chicago National Activity Index and January’s New Home Sales. In addition, St. Louis Fed J.Bullard (2019 voter, centrist) and FOMC member and voter R.Quarles are due to speak ahead of the more relevant semi-annual testimony by Chief J.Powell on Tuesday.

US Dollar relevant levels

As of writing the index is losing 0.31% at 89.63 and a break below 89.54 (21-day sma) would expose 88.44 (low Jan.26) and finally 88.26 (2018 low Feb.16). On the upside, the next resistance lines up at 90.23 (high Feb.22) seconded by 90.57 (high Feb.8) and then 91.00 (high Jan.18).