The US dollar index declined for a second consecutive day, sparked by comments from ECB President Draghi on Tuesday that the threat of deflation in Europe is no longer present. The index is seen approaching a confluence of support that can trigger a reaction.
DXY was last seen trading near the lower bound of a declining trend channel that has contained price action since the start of the year. The lower line of the channel acted as support in early June to trigger a three-day recovery and held a sharp decline ahead of the Fed meeting earlier this month which led to a recovery to a one-month high prior to resuming lower once again.
Slightly below the trendline support, a horizontal level at 95.89 marks the spike low posted during the US election. This same spike has been breached in EUR/USD but USD/CHF has held above it as it has posted a low of 0.9579 in the week thus far versus the November spike low of 0.9549.
Near-term resistance falls at 96.32 which was the spike low posted ahead of the Fed meeting, followed by 96.51 which had triggered a recovery earlier this month.