US Dollar finds support around 89.80 ahead of US PPI

• The index remains vulnerable on Tuesday with decent support near 89.80.
• US 10-year yields a tad off peaks in the 2.80%-2.81% area.
• Later in the session, US Producer Prices are due for the month of March.

The greenback, in terms of the US Dollar Index (DXY), remains under pressure during the first half of the week while it keeps looking to regain the 90.00 milestone.

US Dollar looks to data, FOMC, China

The index is so far retreating for the third session in a row today, extending the leg lower after being rejected from last week’s double tops in the 90.60 region.

The renewed demand for the safe haven JPY has dragged USD/JPY to lower levels and has in turn impacted on DXY, which stays depressed after breaking below the critical support at 90.00 the figure.

Further out, the buck should keep focused on the US-China trade disputes, which showed some signs of losing momentum after Trump’s optimistic comments and China’s Xi Jinping pledge to open further the economy.

Earlier in the session Dallas Fed R.Kaplan (non voter, centrist) advocated for some patience when comes to further rate hikes and expects inflation to move gradually to the Fed’s target.

In the US data space, Producer Prices for the month of March are due next ahead of inflation figures tracked by the CPI and the FOMC minutes, both due tomorrow.

US Dollar relevant levels

As of writing the index is losing 0.03% at 89.81 facing the next support at 89.76 (55-day sma) seconded by 89.41 (low Mar.7) and then 88.94 (low Mar.27). On the other hand, a breakout of 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.1).