Dollar Index holds near two-week highs as 10-yr yield clocks fresh 4-year high

• The dollar index (DXY) looks north as the 10-year yield looks set to scale the 3 percent mark. 

The dollar index, which tracks the value of the greenback against the basket of the currencies, is trading just short of the two-week high of 90.47 set on Friday. 

As of writing, the DXY is trading at 90.37 - up 1 percent from the last week's low of 89.50. The greenback picked up a bid last week, tracking the rise in the 10-year treasury yield.

It appears as though the American currency is set to break above 90.94 (March 1 high) in a convincing manner as the rally in the 10-year yield has just begun, according to technical studies. The bull flag breakout and the inverse head-and-shoulders breakout seen in the 10-year chart indicates scope for a rally to 3.5 percent. 

However, if greenback may find it hard to score gains against the traditional safe havens like the Yen and the CHF if the equities respond negatively to further rise in the 10-year treasury yield. 

Dollar Index Technical Levels

A break above 90.60 (April 5 high) would allow a test of resistance lined up at 90.94 (March 1 high) and 91.00 (psychological hurdle). On the downside, breach of support 90.15 (Jan. 19 low) could yield a pullback to 89.82 (April 2 low) and 89.40 (March 7 low).