US Dollar Index: DXY struggles to cheer Fed rate hike concerns, upbeat yields around 104.00

• US Dollar Index remains depressed after reversing from the highest levels in three months, mildly offered of late.
• Fears of slower US economic growth, mixed concerns about Fed rate hike prod DXY traders.
• Upbeat yields put a floor under DXY prices amid sluggish sessions.
• Risk catalysts, second-tier US data eyed for clear directions.

US Dollar Index (DXY) stays pressured around 104.00 amid early Thursday in Asia as hawkish Fed bets jostle with the US growth fears amid sluggish session. In doing so, the greenback’s gauge versus six major currencies fail to justify upbeat US Treasury bond yields, as well as the greenback’s haven status.

That said, the benchmark US 10-year Treasury bond yields rose the most in five weeks to 3.79% while the two-year counterpart marched to 4.52% at the latest.

On Wednesday, the latest Organisation for Economic Co-operation and Development (OECD) report said that the global economy is set for a weak recovery over the coming years as persistent core inflation and tighter monetary policy weigh on demand.

It should be noted that the looming fears of a $1.0 bond issuance by the United States Treasury Department, due to the debt-ceiling deal, also prods the market sentiment and weigh on the bond price, as well as bolster the yields while putting a floor under the DXY.

On the same line, downbeat statistics from China and the US underpin global recession woes and join the fears of higher interest rates from the key central banks to weigh on the risk appetite and favor the US Dollar.

Furthermore,

Alternatively, the market’s bets on the Federal Reserve’s 25 bps rate hike in July increased, even as the June Federal Open Market Committee (FOMC) is likely to keep the rates unchanged. The same joins recently downbeat US data to weigh on the US Dollar Index (DXY) amid a sluggish session.

Technical analysis

A one-week-old descending resistance line, around 104.20 at the latest, joins nearly overbought RSI (14) and looming bear cross on the MACD to direct US Dollar Index bears toward the 100-day Exponential Moving Average (EMA), around 103.40 by the press time.