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Forex: US Dollar Index in session highs, around 79.60

The US Dollar Index, which tracks the greenback against its major competitors, is heading north on Monday as risk aversion is reining in the global markets. Renewed fears about the euro zone health have spooked investors at the beginning of the week, pushing bond yields in Spain and Italy to higher ground.

In light of the next events due next March, M.Mohi-uddin, Director of FX Strategy at UBS, explained “Clearly, avoiding the next fiscal cliff on March 1 will be the next key test for America's currency. In the near term that perversely may help the dollar as we head towards the end of February. But if Washington's politicians can agree on new budgetary policies, then a clearer fiscal outlook will encourage US companies to invest more during the rest of 2013. That will lower unemployment, induce the Fed to stop easing and allow the greenback to rebound back to its long-term fair values of 1.15-1.20 by year-end against the euro”.

At the moment, the index is up 0.49% at 79.58
According to tradingcentral.com the next resistance levels line up at 79.65, 79.90 and 80.15; while supports are located at 79.20, 78.90 and 78.75

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