US Dollar eases from highs, back around 89.60

• DXY tested 89.75 before sellers stepped in.
• US 10-year yields dropped to 2.70%.
• US trade balance, Bullard next on tap.

The greenback, in terms of the US Dollar Index (DXY), is posting moderate losses on Tuesday, coming back to the 89.60 area after climbing as high as the 89.75/80 band at the beginning of the week.

US Dollar focused on data, risk

The index is reverting the so far positive start of the week against the backdrop of increasing risk-off sentiment.

The sell off in the global markets has dragged DowJones more than 4% lower on Monday while the pessimism in the crypto-universe remains intact and the S&P500 is already losing more than 6% this month, all amidst a sharp pick up in volatility (VIX near 39 on Monday) and a broad-based ‘flight to safety’ sentiment.

DXY lost some momentum along with a drop of nearly 10 bp in yields of the US 10-year note from recent multi-year peaks above the 2.80% handle, all despite growing prospects of extra tightening by the Federal Reserve

In the US data space, trade balance figures, JOLTs job openings and the speech by St.Louis Fed J.Bullard (neutral, 2019 voter) are all due later in the NA session

US Dollar relevant levels

As of writing the index is losing 0.32% at 89.40 and a break below 88.55 (low Feb.2) would open the door to 88.42 (2018 low Jan.25) and finally 86.60 (weekly trend line off 72.70). On the upside, the next up barrier is located at 89.72 (high Feb.6) seconded by 90.70 (high Jan.22) and then 90.98 (high Jan.18).