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US Dollar Index Technical Analysis: Water under the bridge

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The US Dollar Index (DXY) is seeing its safe-haven inflows abate on Tuesday with markets dialling down on their bets of political turmoil in Europe after the election outcome. With sovereign bond spreads in the Eurozone easing from their distressed levels, it looks like the Greenback might need to look somewhere else for support. Fed speakers will be holding the key as their comments might move the DXY should the hawkish stance prevail even after those softer inflation numbers. 

On the upside, no big changes to the levels traders need to watch out for. The first is 105.52, where the DXY is trading around this Tuesday, which is a barrier that held during most of April. The next level to watch is 105.88, which triggered a rejection at the start of May and will likely play its role as resistance again. Further up, the biggest challenge remains at 106.51, the year-to-date high from April 16. 


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