US Dollar drops to new session low near 98.80

After having spent the majority of the day in a tight range around the 99 mark, the US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, met some fresh selling pressure and slipped to a new session low at 98.82. At the moment, the index is at 98.86, lower 0.12% on the day.

This recent sell-off might struggle to gather momentum as it's seen as a technical movement, which hasn't been backed by a fundamental development nor data. The only data worth mentioning from the U.S. showed that the ISM New York Index eased to 55.8 in April from 56.5 in March.

The major stock indexes in the U.S. are having a relatively weak performance on Tuesday and push investors towards safer U.S. Treasuries. A higher demand for the U.S. T-bonds drags their yield lower, hurting the greenback. As of writing, the 10-year bond yield was losing 1.55% at 2.29%.

Technical outlook

With a clean break above 99 (psychological level), the index could aim for 99.75 (Mar. 23 low) and 100 (psychological level). To the downside, supports could be seen at 98.75 (May. 1 low), 98.30 (Nov. 10 low) and 98 (psychological level).

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