Dollar Index: Flatlined despite reports of US/China trade dialogue
- Reports of US/China trade dialogue fail to lift the greenback.
- US budget deficit concerns could hurt USD.
The reports of US-China trade talks have put a bid under the S&P 500 futures, but so far, has not had any positive impact on the greenback.
The dollar index (DXY), which tracks the value of the greenback against majors, is trading in a sideways manner around 89.40. Also, the 10-year US treasury yield is flatlined around 2.83 percent.
US budget deficit woes could cap gains in the greenback
The American dollar may rise if the US and/or China soften their stance on trade, however, the gains will likely be short-lived as the $1.3 billion spending bill approved by Congress, and signed by Trump could bring the budget deficit/twin deficit fears to the forefront.
Dollar Index Technical Levels
A break above 89.56 (March 14 low) would expose resistance at 89.78 (5-day MA) and 90.00 (psychological hurdle). On the downside, breach of support at 89.40 (March 7 low) could yield a sell-off to 89.02 (Feb. 5 low) and 88.72 (Jan. 26 low).