US Dollar Index consolidates around 103.70, focus shifts on US inflation

The DXY struggled above 104.00 and dropped lower modestly.
The upbeat NFP vs lower inflation forecasts have confused the market participants.
Fed’s Bostic sees interest rates between 2.00-2.50% by the end of 2023.

Sagar Dua FXStreet

The US dollar index (DXY) is oscillating in a narrow range of 103.58-103.77 in the Asian session as investors are awaiting the release of the US Consumer Price Index (CPI), which will dictate the further direction of the asset. The US CPI will be released on Wednesday, and investors expect a slippage in the figures. A preliminary estimate for the US CPI is 8.1% against the multi-year high print of 8.5% recorded last month.

Upbeat NFP vs Lower inflation forecasts

The US Nonfarm Payrolls (NFP) landed at 428k last week. The job additions remained higher than the forecast of 391k, which bolstered the odds of a 75 basis point (bps) by the Federal Reserve (Fed) for June’s monetary policy. On the other side, a lower inflation forecast indicates that recent quantitative measures are barricading the soaring inflation, and an occurrence of the same may compel the Fed to adopt not so aggressive hawkish stance. Therefore, investors are in a dilemma on betting with or against the DXY, which has turned the asset sideways.

Fed’s Bostic speech

On Monday, Atlanta Fed President Raphael Bostic said that the Fed's most recent 50 bps rate hike was an "aggressive" move and that the Fed can stay at this pace, as per his interview at Bloomberg. Fed policymaker sees interest rates in a defined range of 2.0-2.5% by the end of 2023.

Key events this week: Consumer Price Index (CPI), Initial Jobless Claims, Producers Price Index (PPI), Michigan Consumer Sentiment Index (CSI).

Eminent issues on the back boiler: Russia-Ukraine Peace Talks, China’s CPI, and European Central Bank (ECB) President Christine Lagarde’s speech.

Dollar Index Spot

Overview
Today last price	103.71
Today Daily Change	-0.02
Today Daily Change %	-0.02
Today daily open	103.73

Trends
Daily SMA20	101.96
Daily SMA50	100
Daily SMA100	98
Daily SMA200	96.06

Levels
Previous Daily High	104.19
Previous Daily Low	103.39
Previous Weekly High	104.07
Previous Weekly Low	102.34
Previous Monthly High	103.94
Previous Monthly Low	98.31
Daily Fibonacci 38.2%	103.69
Daily Fibonacci 61.8%	103.88
Daily Pivot Point S1	103.35
Daily Pivot Point S2	102.97
Daily Pivot Point S3	102.55
Daily Pivot Point R1	104.15
Daily Pivot Point R2	104.57
Daily Pivot Point R3	104.95

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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