US Dollar Index looks depressed near 96.30 ahead of ISM

• DXY remains well on the defensive in the low-96.00s.
• US yields remain largely range bound on Tuesday.
• Markit’s final Manufacturing PMI came at 55.5 in January.

Sellers remain well in control of the sentiment around the greenback and drag the US Dollar Index (DXY) to new 4-day lows in the 96.25/20 band.

US Dollar Index offered ahead of key data

The index extends the rejection from last week’s fresh cycle tops near 97.50, although the downside appears to have met some decent contention in the proximity of 96.20 on Tuesday.

In the US money markets, yields seem to be picking up some pace across the curve and manage to leave behind part of the recent pessimism. Indeed, the short end keep the upper bound of the range intact near 1.18%, while the belly flirt with the 1.80% yardstick.

In the US docket, the final Markit’s Manufacturing PMI came a tad better than estimates at 55.5 for the month of January, all ahead of the key ISM Manufacturing PMI to be released soon.

US Dollar Index relevant levels

Now, the index is losing 0.30% at 96.36 and a break above 97.44 (2022 high Jan.28) would open the door to 97.80 (high Jun.30 2020) and finally 98.00 (round level). On the flip side, the next down barrier emerges at 96.09 (55-day SMA) seconded by 95.41 (low Jan.20) and then 94.62 (2022 low Jan.14).