US Dollar Index falters ahead of the 55-day SMA near 97.60


  • The upside in DXY run out of steam near 97.60.
  • US CPI disappointed expectations last month.
  • Speeches by FOMC’s Williams and George coming up next.

The greenback, when measured by the US Dollar Index (DXY), has once again failed to surpass recent tops in the vicinity of 97.60, coincident with the 55-day SMA.

US Dollar Index up post-CPI results

The index is extending the weekly upside for the second session in a row on Tuesday amidst the prevailing risk-on tone and despite poor results from the domestic docket and declining US yields.

Indeed, the greenback managed to fade the initial pessimism and regained poise despite US inflation figures came in on the soft side for the month of December. Furthermore, headline CPI rose 0.2% MoM and 2.3% on an annualized basis, while Core CPI gained 0.1% inter-month and 2.3% on a yearly view. Earlier in the session, the NFIB index also surprised to the downside, dropping to 102.7 during last month.

The firm note in the buck remains despite yields of the key US 10-year note have lost the grip and are now challenging the 1.82% level, down around 4 bps from earlier tops.

Later in the day, NY Fed J.Williams (permanent voter, centrist) will discuss Behavioural Science in London and Kansas City Fed E.George (2022 voter, hawkish) speaks at an event in KC.

What to look for around USD

The index has started the week on a mild positive tone following last week’s new 2020 highs and despite the latest Payrolls figures disappointed expectations. In the meantime, all the attention has now shifted to the imminent sign of the ‘Phase One’ deal with China while tensions on the US-Iran front continues to evaporate. So far, the recovery in the greenback continues to target the key 200-day SMA in the 97.70 region. Above this level, DXY should regain the constructive view, always underpinned by the so far ‘wait-and-see’ stance from the Fed vs. the broad-based dovish view from its G10 peers, the dollar’s safe haven appeal and its status of ‘global reserve currency’.

US Dollar Index relevant levels

At the moment, the index is gaining 0.06% at 97.43 and a breakout of 97.58 (2020 high Jan.9) would open the door to 97.69 (200-day SMA) and finally 97.87 (61.8% Fibo of the 2017-2018 drop). On the other hand, initial contention is expected at 97.19 (21-day SMA) seconded by 96.36 (monthly low Dec.31) and finally 96.04 (50% Fibo of the 2017-2018 drop).

Share: Feed news

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 assets. 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 Open Markets 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. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD clings to daily gains above 1.0650

EUR/USD clings to daily gains above 1.0650

EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.

EUR/USD News

GBP/USD recovers toward 1.2450 after UK Retail Sales data

GBP/USD recovers toward 1.2450 after UK Retail Sales data

GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.

GBP/USD News

Gold holds steady at around $2,380 following earlier spike

Gold holds steady at around $2,380 following earlier spike

Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.

Gold News

Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium

Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in

Bitcoin price shows no signs of directional bias while it holds above  $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research. 

Read more

Week ahead – US GDP and BoJ decision on top of next week’s agenda

Week ahead – US GDP and BoJ decision on top of next week’s agenda

US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.

Read more

Forex MAJORS

Cryptocurrencies

Signatures