DXY
Dollar Bounces
Seeing some bounce from the Dollar Index is hardly a surprise from a technical perspective. Just look at the heaviness of the support on the weekly chart would tell you a small bounce would be in order in pretty much any market. So, some USD 'strength' on the rising US10 Y yields is hardly a surprise. An obvious cap to rising yields is seen at 1.25%. And yields at that rate will likely find some buyers keen to hedge in some gains against an equity fall.
![USD](http://az705044.vo.msecnd.net/20210111/screenshot-2021-01-11-at-10.01.23.png)
Dollar Index
With all the talk of the 'crowded USD trade' some profit taking makes sense at the 89.00 level on the Dollar Index. Seeing a bounce here is expected. I was short the Dollar index last year as the Dollar tends to be very weak from a seasonal perspective. Check out the stats here:
![Dollar](http://az705044.vo.msecnd.net/20210111/usd-index-stats.png)
The obvious target was when price fell into the weekly support level. So, for me any bounce here in the USD is a natural retracement. Next major near term resistance marked on the chart with major trend line above at 93.00 & 95.00 (marked). Expect sellers as/if price retraces higher.
![USD buyers](http://az705044.vo.msecnd.net/20210111/dxy.png)