The US Dollar Index staged a modest recovery but remains capped near the 100 level as traders adopt a defensive posture entering the week, according to Scotiabank strategists Shaun Osborne and Eric Theoret. The greenback’s cautious rebound comes amid risk-off sentiment across markets, with equity positions turning defensive while Treasury bonds strengthen on safe-haven demand. The strategists note the dollar’s gains remain limited despite the broader risk-averse environment, suggesting underlying weakness in the currency’s momentum. This muted recovery indicates traders are reluctant to chase dollar strength aggressively, even as traditional risk-off dynamics typically favor the greenback. The technical resistance near 100 on the Dollar Index appears to be holding for now, preventing any meaningful breakout.
FXnCO Insight
Traders should monitor the 100 level closely as a decisive break above could trigger short-covering and momentum buying, while failure to breach this threshold may signal renewed dollar weakness and potential rotation into risk assets.
Source: FXStreet