Dollar Index capped again by 90.80 erases gains

• DXY finds resistance at 90.80 and retreats. 
• US Dollar recovery losses strength; repeats yesterday’s performance. 

The recovery of Dollar Index (Spot) from the lowest level in three years found resistance around the 90.80 area that also capped yesterday’s rally. On Asian hours it bottomed at 90.21 and then rebounded. After reaching 90.82 pulled back and it was trading at 90.54, up 0.1% for the day. 

The greenback lost strength after the beginning of the American session, despite US economic data. Industrial Production rose 0.9% above the 0.4% expected but the dollar moved lower. 

DXY continued to consolidate after been unable to move away from multi-year lows. The recovery of the US Dollar against the yen, was offset by a rebound of EUR/USD from 1.2200 and most recently by a rally of the pound across the board that sent GBP/USD toward 1.3850. 

The index was repeating yesterday’s moves when it rose during most of the day but it failed to break above 90.80 and ended marginally lower near 90.40. The greenback avoided another sharp slide but it was still seen under pressure. 

Dollar Index Technical Levels

To the upside, immediate resistance might lie around the 90.80/85 area. A break higher would clear the way for a test of 91.00; above the next resistance could be seen at 91.45 (Sep 20 low). On the downside, support levels could be located at 90.40 followed by 90.20 and 90.00 (psychological).