|

US Dollar Index: DXY bulls take a breather around 103.00 as Fed Chair Powell’s speech looms

  • US Dollar Index struggles to defend two-day rebound from the lowest levels since April 2022.
  • Strong US employment data, fears surrounding China joined BOE/ECB play to underpin DXY rebound.
  • Lack of major data/events, cautious mood ahead of Fed Chair Powell’s appearance probe US Dollar bulls.

US Dollar Index (DXY) stays defensive above 103.00 as bulls await more clues to extend the two-day recovery from the lowest levels since April 2022.

In doing so, the greenback’s gauge versus the six major currencies justifies the lack of major data/events to consolidate the latest upside. That said, the strong US jobs report and geopolitical fears surrounding China allowed the DXY to trigger the much-awaited rebound.

It’s worth noting that the US Bureau of Labor Statistics (BLS) surprised markets by revealing that the Nonfarm Payrolls (NFP) rose by 517K in January, versus 185K expected and 260K (upwardly revised) prior. It’s worth noting that the Unemployment Rate also dropped to 3.4% from 3.5% prior and 3.6% expected but the Average Hourly Earnings eased during the stated month.

The rebound in the US ISM Services PMI from 49.2 to 55.2, versus 50.4 expected, also underpinned the rebound in the United States Treasury bond yields and the US Dollar. That said, the benchmark US 10-year Treasury bond yields jumped the most since late September 2022 to regain 3.52% level by the volatile week’s end.

Additionally, the recent fears surrounding the US and China ahead of this week’s US diplomat visit to China also weigh on the market’s risk appetite. “A US military fighter jet shot down a suspected Chinese spy balloon off the coast of South Carolina on Saturday, a week after it first entered US airspace and triggered a dramatic -- and public -- spying saga that worsened Sino-US relations,” said Reuters.

Against this backdrop, US 10-year Treasury bond yields remain firmer around 3.55% while the S&P 500 Futures print mild losses by the press time.

Moving on, Tuesday’s speech from Federal Reserve (Fed) Chairman Jerome Powel and Friday’s US UoM Consumer Sentiment Index for February, as well as the University of Michigan's 5-year Consumer Inflation expectations, will be crucial for fresh impulse. Should Fed Chair Powell praise the recent hawkish signals from the US data, the DXY could extend the latest recovery.

Technical analysis

Clear upside break of a three-month-old descending resistance line, now support around 101.95, directs DXY bulls towards a downward-sloping trend line resistance from late November 2022, close to 104.00 at the latest.

Additional important levels

Overview
Today last price103.11
Today Daily Change0.11
Today Daily Change %0.11%
Today daily open103
 
Trends
Daily SMA20102.25
Daily SMA50103.6
Daily SMA100106.53
Daily SMA200106.69
 
Levels
Previous Daily High103.01
Previous Daily Low101.55
Previous Weekly High103.01
Previous Weekly Low100.81
Previous Monthly High105.63
Previous Monthly Low101.5
Daily Fibonacci 38.2%102.45
Daily Fibonacci 61.8%102.1
Daily Pivot Point S1102.03
Daily Pivot Point S2101.06
Daily Pivot Point S3100.57
Daily Pivot Point R1103.49
Daily Pivot Point R2103.98
Daily Pivot Point R3104.96

Author

Anil Panchal

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

More from Anil Panchal
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD moves sideways below 1.1800 on Christmas Eve

EUR/USD struggles to find direction and trades in a narrow channel below 1.1800 after posting gains for two consecutive days. Bond and stock markets in the US will open at the usual time and close early on Christmas Eve, allowing the trading action to remain subdued. 

GBP/USD keeps range around 1.3500 amid quiet markets

GBP/USD keeps its range trade intact at around 1.3500 on Wednesday. The Pound Sterling holds the upper hand over the US Dollar amid pre-Christmas light trading as traders move to the sidelines heading into the holiday season. 

Gold retreats from record highs, trades below $4,500

Gold retreats after setting a new record-high above $4,520 earlier in the day and trades in a tight range below $4,500 as trading volumes thin out ahead of the Christmas break. The US Dollar selling bias remains unabated on the back of dovish Fed expectations, which continues to act as a tailwind for the bullion amid persistent geopolitical risks.

Bitcoin slips below $87,000 as ETF outflows intensify, whale participation declines

Bitcoin price continues to trade around $86,770 on Wednesday, after failing to break above the $90,000 resistance. US-listed spot ETFs record an outflow of $188.64 million on Tuesday, marking the fourth consecutive day of withdrawals.

Economic outlook 2026-2027 in advanced countries: Solidity test

After a year marked by global economic resilience and ending on a note of optimism, 2026 looks promising and could be a year of solid economic performance. In our baseline scenario, we expect most of the supportive factors at work in 2025 to continue to play a role in 2026.

Avalanche struggles near $12 as Grayscale files updated form for ETF

Avalanche trades close to $12 by press time on Wednesday, extending the nearly 2% drop from the previous day. Grayscale filed an updated form to convert its Avalanche-focused Trust into an ETF with the US Securities and Exchange Commission.