- The US Dollar Index is extending its losses after turning around yesterday.
- The US inflation report is set to determine the next significant move of the dollar.
- The wider technical picture remains bearish.
The US dollar index is trading at around 89.70, falling below the round 90 level. The recovery of the index sent it to a high of 90.60 well above the low of 88.60.
The US dollar has been under pressure on Tuesday as stock markets stabilized. Equities are trading slightly higher on the day, but trading volumes and volatility have both calmed down. The share s´sell-off last week supported the greenback against most of its peers, triggering a recovery in the US Dollar Index.
Markets are waiting for the closely-watched US inflation report on Wednesday. Core CPI is expected to remain unchanged at 1.8% y/y. See the full preview here. The US will also publish the retail sales report for January.
US Dollar Index Technical Analysis
The US Dollar Index is trading well below the 200-day Simple Moving Average and also below the 50-day SMA which currently stands at 91.60. The RSI has resumed its fall after attempting to recover above 50 and is sliding once again, pointing to further losses. Momentum remains negative.
At current levels, the index is close to the 89.60 that capped the index in late January. Below this support line, 88.60 is a critical support line. Below 88.60, 85 is the next significant level to watch.
Looking up, the top of the recent range is 90.60. Further above, 91 serves as resistance after holding the index down early in the year. The 91.60 level is notable as well.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.