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).

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD near daily lows with mixed US data

The EUR/USD pair continues trading just above the 1.1000 level, as US Durable Goods Orders rose by 2.4%, largely surpassing the market’s expectations, although core readings plummeted in the red.

EUR/USD News

GBP/USD below 1.3000 ahead of BOE

The dollar continues to advance against all of its major rivals, getting an additional boost from upbeat CB Consumer Confidence. GBP/USD trading around 1.2980. BOE to have a monetary policy meeting this Thursday.

GBP/USD News

Bitcoin moving on the razor edge

Yesterday's positive day along the crypto board has brought the BTC/USD pair to the borderline between a bearish market and a free space where it can grow again in search of new historical highs. 

Read more

WTI bounces off lows, back above $53.00/bbl

After hitting new lows in levels last seen in early October 2019 near $52.00, prices of the WTI have managed to regains some attention and have retaken the $53.00 mark per barrel.

Oil News

USD/JPY Forecast: Consolidating at lows, bearish

Coronavirus-related fears and upcoming first-tier event keeping investors in cautious mode. US Durable Goods Orders seen posting a tepid advance in December. USD/JPY at risk of resuming its decline once below 108.65.

USD/JPY News

Forex MAJORS

Cryptocurrencies

Signatures