US Dollar Index challenges 3-day lows near 97.00

• The index comes under pressure near 97.00.
• Yields of the US 10-year note approach 2.55%.
• February Factory Orders next on tap in the docket.

A bout of selling pressure is now hurting the greenback and is dragging the US Dollar Index (DXY) to fresh lows in the vicinity of the 97.00 handle.

US Dollar Index weaker on better risk mood

The sentiment around the riskier assets is now gathering extra traction and is putting the buck under further downside pressure, forcing the index to flirt with the critical support at 97.00 the figure.

DXY is so far reversing two daily advances, as Friday’s better-than-expected US Payrolls plus talk of extra stimulus in the Chinese economy continues to fuel the demand for USD competitors.

Moving forward, Factory Orders for the month of February are due next ahead of the more relevant FOMC minutes and inflation figures gauged by the CPI expected on Wednesday.

What to look for around USD

DXY keeps tracking the broad risk appetite trends and particularly any headlines coming from the US-China trade developments. In addition, positive results in the US calendar have been also fuelling the upside in DXY to 97.00 and beyond, while market participants continue to adjust to the prospects of no hikes from the Fed this year and just one probable rate raise in 2020. Additionally, the buck’s safe haven appeal and widening rate differentials vs. its peers are also are also lending support to the move. From the political view, the debt ceiling, the border-wall funding and upcoming elections next year carry the potential to spark bouts of extra volatility around the greenback.

US Dollar Index relevant levels

At the moment, the pair is retreating 0.35% at 97.02 and faces initial contention at 96.84 (21-day SMA) seconded by 96.59 (55-day SMA) and finally 95.74 (low Mar.20). On the other hand, a break above 97.52 (high Apr.2) would expose 97.71 (2019 high Mar.7) and finally 97.87 (monthly high Jun.20 2017).