The rise of the US Dollar and Yields into month/quarter end

Be cautious of a possible pullback in the DXY and 10 year-yields after March 31st


In our Week Ahead for last week, we highlighted the daily US Dollar Index (DXY) as the Chart of the Week.   We noted that price had broken out of a flag pattern on the daily timeframe and was heading towards the target price from the flag breakout and a descending wedge, near 94.00. Indeed, price action over the last 2 days shows the DXY is on its way.  However, the DXY is running into a major resistance trendline.  If price is to move to target, it must first get through the upward sloping weekly trendline dating back to Spring 2011!

Source: Tradingview, City Index

On a daily timeframe, price has easily cleared the 200 Day Moving Average at 92.52.  The weekly trendline (red line) crosses at the current highs of the day, near 93.35.  However, with Wednesday as month end AND quarter end, traders may be looking to thrust price higher above the trendline and accelerate the US Dollar Index towards the target. The flag target and the target for the descending wedge converge between 94.00 and 94.17.  The RSI has barely moved into overbought territory, however if the current flows continue into month/quarter end, this may be irrelevant. Be wary of a pullback after month/quarter end flows have finished!

Source: Tradingview, City Index

Interest rates have risen today as well to their highest level since January 2020, pre-pandemic.  However, 10-year yields are pushing up against horizontal resistance, the 50% retracement level from the November 2018 highs to the March 9th, 2020 lows, near 1.77%/1.80%.  The RSI is also diverging and may be considered a “3-driver” RSI, in which yields put in 3 higher highs and the RSI puts in 3 lower highs.  This indicates a strong possibility of a reversal.   In addition, although today isn’t over, today’s action is forming a shooting star, which is an indication of a possible reversal.  The move higher in yields may continue higher into March 31st, however, traders should be aware that the month end selling (of bonds) may end shortly and yields could fall.  If the happens, the US Dollar may pull back as well.

Source: Tradingview, City Index

The rise in the US Dollar Index and 10-year yields over the last week has been impressive!  However, tomorrow is month end and quarter end. Be cautious of a possible pullback in the DXY and 10 year-yields as pension funds, mutual funds, and hedge funds try and position themselves for rebalancing and a bit of “window dressing”!

Learn more about forex trading opportunities


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.