The DXY (US Dollar Index) has maintained its bullish stance as the US dollar has caught a safe haven bid against some currencies amid the Russian invasion of Ukraine, and many are wondering if it can last. I think we should be asking ourselves "why isn't the USD much higher?"
You'd think with some major indexes in the US off over 15% the US dollar would be higher. And with EUR/USD trading to new 2022 lows Tuesday, you would think the DXY would be nearing the 100 level.
There are many currencies holding up better than the EUR, namely the AUD, NZD, NOK, and JPY and with yields coming down and aggressive rate hike expectations also slipping, the USD may be on the cusp of a move back towards the 96.00 level. Below there, an ascending trend line from mid 2021 resides and a break of this trend line would put the 200-dma back in view.
On any rally, the 98.05 level would be the 127% extension of the last move lower in February, which is in the important early 2020 resistance zone.
