US Dollar extends the upside to 90.40, focus on US data

• The index remains firm above the key 90.00 handle on Monday.
• US 10-year yields in multi-year tops, now target the 3.0% level.
• US Existing Home Sales, Markit’s flash PMI due next on tap.

The US Dollar Index (DXY), which gauges the buck vs. a basket of its main competitors is looking to add to recent gains while keeping the trade above the critical 90.00 mark at the same time.

US Dollar focused on yields, data

The index is prolonging the upbeat mood at the beginning of the week after four consecutive daily advances. Furthermore, the underlying tone around the buck remains firm with the next target at monthly peaks in the 90.60 area.

The recent strong rebound in DXY from last week’s lows in the 89.20 area has been in tandem with a significant raise in yields of the key US 10-year benchmark, which is trading at shouting distance from the key 3.0% level.

The pick up in the risk on sentiment in response to mitigated concerns on the geopolitical front as well as in the US-China trade conflict has been also lending support to the buck via a higher USD/JPY, as outflows from the Japanese safe haven has accelerated as of late.

On the positioning front, speculators added to USD net shorts during the week ended on April 17 to the highest level since February 13, as per the latest CFTC report.

Data wise later in the NA session, Existing Home Sales during last month are due seconded by the Chicago Fed National Activity Index, while Markit will publish its preliminary Manufacturing PMI for the current month.

US Dollar relevant levels

As of writing the index is up 0.14% at 90.47 and a break above 90.60 (high Apr.6) would open the door to 90.89 (38.2% Fibo of 95.15-88.25) and finally 90.93 (high Mar.2). On the other hand, the next down barrier lines up at 89.81 (10-day sma) followed by 89.23 (low Apr.17) and then 88.94 (low Mar.27).