USD Index looks flat around 102.60 ahead of data

The greenback, when tracked by the USD Index (DXY), trades in a flattish fashion around 102.60 at the end of the week.

USD Index now looks at data

The index seems to have met some firm contention around the 102.00 neighbourhood – or multi-week lows – so far this week, as market participants continue to digest Wednesday’s dovish hike by the Federal Reserve and the dovish tilt at Powell’s press conference.

In the meantime, speculation of a pause in the Fed’s hiking cycle continues to run high and underpins the current bearish sentiment around the dollar, while easing banking jitters also prop up the risk complex and represent another source of weakness for the buck.

Later in the NA session, Durable Goods Orders for the month of February are due seconded by advanced Manufacturing/Services PMIs and the speech by St. Louis Fed J.Bullard (2025 voter, hawk).

What to look for around USD

The index remains well under pressure, although it manages to put further distance from recent lows in the sub-102.00 region on Friday.

So far, speculation of a potential Fed’s pivot in the short-term horizon should keep weighing on the dollar, although the still elevated inflation, the resilience of the US economy and the hawkish narrative from Fed speakers are all seen playing against that view for the time being.

Key events in the US this week: Durable Goods Orders, Advanced PMIs (Friday).

Eminent issues on the back boiler: Rising conviction of a soft landing of the US economy. Persistent narrative for a Fed’s tighter-for-longer stance. Terminal rates near 5.5%? Fed’s pivot. Geopolitical effervescence vs. Russia and China. US-China trade conflict.

USD Index relevant levels

Now, the index is retreating 0.03% at 102.55 and the breach of 101.93 (monthly low March 23) would open the door to 100.82 (2023 low February 2) and finally 100.00 (psychological level). On the other hand, the next resistance emerges at 103.88 (55-day SMA) followed by 104.37 (100-day SMA) and then 105.88 (2023 high March 8).