The greenback remains on the defensive and now drags the US Dollar Index (DXY) to the sub-92.00 region or fresh multi-week lows. The index sees its decline accelerated and drops below the 92.00 marks for the first time in several weeks, as market participants continue to digest Wednesday’s steady hand by the Federal Reserve. In fact, US yields ground lower and the dollar intensified the selloff after the Committee noted no urgency in start tapering the QE program at its meeting on Wednesday. In addition, the FOMC did not show extra concern over the risks surrounding inflation or the prospects for economic growth.

DXY’s selloff manages to re-test the 92.00 neighbourhood after dollar-bulls were disappointed by the dovish tone at the FOMC event on Wednesday. A clear direction in the price action around the buck is now expected to emerge after the post-FOMC dust settles. In the meantime, bouts of risk aversion in response to coronavirus concerns, the solid pace of the economic recovery, high inflation, and prospects of earlier-than-expected QE tapering/rate hikes should remain key factors supporting the dollar. Now, the index is losing 0.27% at 92.01 and faces the next support at 91.98 (monthly low Jul.29) seconded by 91.51 (weekly low Jun.23) and then 91.34 (200-day SMA). On the upside, a break above 93.19 (monthly high Jul.21) would open the door to 93.43 (2021 high Mar.21) and finally 94.00 (round level).