Dollar Index Outlook for March
Kep points
- The dollar index has been moving in zigzag, failing to find a trend direction
- The price has been holding the $90 support level
- Technical outlook
The dollar index has been making a zigzag movement in recent weeks
The dollar index started the month of March at a firm position after holding the level of $90 throughout February. The market has failed to respect the expected bearish outlook. This happened even after the stock market rallied higher and the approval of Joe Biden’s stimulus program. The strong support level has managed to keep the dollar stable. This is in spite of the market moving in consolidative mode and failing to find a trend direction.
DXY has been responding to the movement of the bond yields, which has been rallying up. Many Americans have been taking their money out of stocks to buy bonds, and they are using dollars to buy. This has given the dollar a much-needed demand to stay above the $90 level.
The dollar index continued its rally on Friday. This comes after a strong February jobs data that reported better than expected. It put the dollar in a firm position against other major currencies such as the Euro and the Pound.
The dollar index traders will continue to monitor the strength of the bond yields and should the yields continue to rise. There could be a strong demand to strengthen the Dollar to stay above the $90 level.
Technical outlook
According to the daily swing, the dollar index is on an uptrend movement after failing to stay below the level of $90 as the markets anticipated more losses on the Index. The strong support level of $90 has managed to keep the index above the $90 level, with the pair advancing against the basket of major currencies.
The recent rally in the bond yields has pushed the market above $91, with bond yields strengthening the market demand for the bullish rally. A solid movement above the resistance level of $93 will indicate the presence of buyers. Thereby creating a strong upside momentum needed to challenge the September 25 level of $94.70.
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