- Summary:
- Friday's recovery in the US long-term bond yields and strong Producer Inflation (PPI) figures push the USD Index (DXY) above the 92.00 mark.
The Producer Price Index (PPI) and its core component exceeded the expectations of analysts in March, coming in at 1.0% monthly (versus consensus/previous of 0.5%) and 4.2% on an annualized basis.
According to the report by the US Bureau of Labor Statistics, the core PPI came in at 3.1% on an annualized basis (consensus 2.7%). The double dose of USD-positive data has helped the USD Index to maintain the bullish stance on the day, previously brought on by a rebound in the 10-year Treasury Note by more than 3% on Friday.
Technical Levels to Watch
The USD Index (DXY) has found support at the 91.001 psychological price level, following today’s bounce. The DXY faltered just below the 92.50 resistance. However, the progressively lower intraday highs should be a concern to bulls on the possibility of upside momentum fizzling out. If this is the case, then the correction could resume off a pullback from today’s intraday high, targeting a retest of the 92.001 support. A breakdown of this level opens the door towards 91.50, with 91.261 and 90.965 serving as additional targets to the south.
On the other hand, bulls need a break above 92.50 to re-establish the recovery as this would form a higher high. The breakout would also open the door for the bulls to target the 92.803 resistance. Uncapping of this area brings 93.173 into the picture. The medium-term uptrend reversal would once more resume if the USD Index breaks above the 31 March high in the evening star pattern to rise towards 93.805.
USD Index (DXY) Daily Chart
