US Dollar Index headed toward lowest close in 8 months

The US Dollar dropped on Tuesday, resuming the decline in the market. A rally in US Treasuries weakened the greenback. Assets associated with havens, like gold, the yen and also US bonds, all rose. 

The slide of the greenback was modest but enough to send the US Dollar Index to a fresh post-election low. The DXY was trading at 96.45, a fresh intraday low since November and on a daily basis, about to post the lowest close since October 4. 

Is it time to sell the dollar?

The US 10-year yield fell to 2.129%, also a multi-month low and pushed the dollar to the downside and the yen to the upside. Equity prices in Wall Street were falling modestly. The Dow Jones was down 0.13% and the Nasdaq 0.01%. 

The yen outperformed while commodity link currencies were among the top performers. The pound, ahead of Thursday’s UK elections, lost ground across the board.  

Levels to watch 

To the downside, support levels might lie at 96.40, followed by 96.25 (Sep high) and 96.00. On the upside, resistance now could be seen at 96.65 (May 22 & 23 low), 96.90 (weekly high) and 97.25 (June 1 & 2 high).