Dollar index – slide continues, eyes 50-DMA support

American dollar is being hammered across the board, pushing the US dollar index down to 95.73 and near 50-DMA level of 95.59 levels.

Markets looking for reasons to sell USD

The latest bout of selling in the USD was triggered by the data released yesterday which showed hourly output of workers fell 0.5% annualized in the second quarter. The prior two quarters saw declines of 0.6% and 2.4% respectively. The drop in the productivity means the workers cannot be paid more. Hence, wage growth could remain tepid at best.

Consequently, markets are offering US dollar across the board. Moreover, markets do not see Fed raising rates this year, hence are looking for reasons to sell the US dollar.

USD index Technical Levels

A breakdown of support at 95.59 (50-DMA) would open doors for a drop to 95.00 levels (zero figure). Further losses could run into support at 94.58 (Mar 18 low). On the higher side, resistance at 95.90 (5-DMA) if breached could yield a re-test of 96.12 (daily high). A violation there would expose 96.60 (200-DMA).