US Dollar Index struggles to defend recovery above 104.00 ahead of US GDP

US Dollar Index remains sidelined after snapping two-day downtrend.
Firmer US data, challenges to sentiment underpin DXY rebound.
Pullback in Treasury bond yields, holiday mood restricts immediate upside.
Final readings of US Q3 GDP, PCE details eyed for clear directions.

Anil Panchal FXStreet

US Dollar Index (DXY) remains indecisive around 104.20, struggles to extend the previous day’s rebound during Thursday’s sluggish Asian session. In doing so, the greenback’s gauge versus the six major currencies portrays the market’s holiday mood, as well as the cautious sentiment ahead of this week’s critical data, namely the US Dollar Index struggles to defend recovery above 104.00 ahead of US GDP.

The DXY cheered upbeat US data and challenges to sentiment emanating from Russia to print the first daily gain in three the previous day.

That said, the US Conference Board’s (CB) Consumer Confidence jumped to the eight-month high of 108.3 for December, compared to the market forecasts of 101.0 and the revised prior readings of 101.40. On the other hand, Ukrainian President Volodymyr Zelensky’s US visit and Russian President Vladimir Putin’s readiness to increase the country’s military potential challenge the risk appetite.

Alternatively, a pullback in the US Treasury bond yields joined risk-positive news from China to probe the US Dollar Index buyers. The US 10-year Treasury bond yields remain sidelined near 3.66% after retreating from the monthly high of 3.72% the previous day. On the other hand, the US two-year bond coupons remain pressured around 4.22% after a two-day downtrend.

Recently, hopes of faster economic recovery in Germany and mixed comments from the European Central Bank (ECB) official Mario Centeno join mixed remarks from US President Joe Biden and Ukrainian President Zelensky to restrict the DXY moves amid mixed mood. While portraying the mood, the S&P 500 Futures print mild gains amid sluggish yields and mixed performance in the Asia-Pacific markets.

Risk catalysts could direct intraday DXY moves ahead of the US GDP and Core PCE data for Q3. US GDP is expected to confirm 2.9% Annualized growth in Q3, while the Core PCE is anticipated to also meet the initial forecasts of 4.6% QoQ during the stated period. Also important will be Friday’s Core PCE Price Index for November, the Fed’s preferred inflation gauge.

Technical analysis

A five-week-old bearish channel restricts DXY moves between 102.90 and 104.60.

Additional IMPORTANT levels

Overview
Today last price	104.23
Today Daily Change	-0.03
Today Daily Change %	-0.03%
Today daily open	104.26

Trends
Daily SMA20	104.76
Daily SMA50	106.79
Daily SMA100	108.88
Daily SMA200	106.55

Levels
Previous Daily High	104.38
Previous Daily Low	103.86
Previous Weekly High	105.25
Previous Weekly Low	103.44
Previous Monthly High	113.15
Previous Monthly Low	105.32
Daily Fibonacci 38.2%	104.18
Daily Fibonacci 61.8%	104.06
Daily Pivot Point S1	103.95
Daily Pivot Point S2	103.64
Daily Pivot Point S3	103.42
Daily Pivot Point R1	104.47
Daily Pivot Point R2	104.69
Daily Pivot Point R3	105

Author

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.

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