US Dollar finds support below 89.00

• USD sell-off remains unabated.
• Markets digested Mnuchin’s comments.
• ECB in focus today.

After dropping to fresh multi-year lows in sub-89.00 levels, the greenback – tracked by the US Dollar Index (DXY) – managed to stage a rebound to the vicinity of the 89.00 handle.

US Dollar focused on ECB, Trump

The index has been losing ground since Monday and it remains well within the broader bearish trend that saw the buck shedding ground for the last 6 weeks. It is already down nearly 4% this year.

Today’s fall to fresh lows seems to have awoken some dip-buyers, although the reaction appears tepid for the time being, while market participants appear to have already digested yesterday’s comments by S.Mnuchin.

In the US data space, the usual weekly report on the labour market is next on tap seconded by trade balance figures and December’s new home sales. In addition, USD should remain under pressure in light of the upcoming ECB meeting, where all the attention has shifted to the press conference by President M.Draghi.

US Dollar relevant levels

As of writing the index is losing 0.03% at 89.18 and a break below 88.81 (2018 low Jan.25) would expose 87.64 (low Dec.16 2014) and finally 84.48 (low Oct.15 2014). On the upside, the next barrier aligns at 90.70 (high Jan.22) seconded by 90.98 (high Jan.18) and then 92.64 (high Jan.9).