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  • The index trades in a positive fashion and tested 90.80.
  • The 55-day SMA caps the upside for the time being.
  • Core PCE, Personal Income/Spending, U-Mich next on tap.

The greenback, when gauged by the US Dollar Index (DXY), now fades the initial uptick to the 90.80 region and returns to the 90.60/50 band at the end of the week.

US Dollar Index looks to data

After testing the area of daily highs around 90.80 – where coincides the 55-day SMA – the index came under some selling pressure as the initial risk aversion sentiment looks somewhat deflated now.

In the meantime, usual month-end flows are expected to keep ruling the price action on Friday, while the buck seems to ignore the rebound in yields of the US 10-year benchmark back to the 1.08% region.

In the US data space, inflation figures tracked by the PCE will take centre stage later in the NA session seconded by Personal Income/Spending, Pending Home Sales and the final print of the Consumer Sentiment for the month of January.

What to look for around USD

DXY extends the upside to the vicinity of the 91.00 level amidst alternating risk appetite trends. Occasional bullish attempts in the dollar, however, are expected to be short-lived amidst the fragile outlook for the greenback in the medium/longer-term, and always amidst the massive monetary/fiscal stimulus in the US economy, the “lower for longer” stance from the Federal Reserve and prospects of a strong recovery in the global economy.

US Dollar Index relevant levels

At the moment, the index is advancing 0.10% at 90.54 and a breakout of 91.01 (weekly high Dec.21) would open the door to 91.93 (100-day SMA) and finally 92.46 (23.6% Fibo of the 2020-2021 drop). On the flip side, initial support aligns at 90.23 (21-day SMA) followed by 89.20 (2021 low Jan.6) and finally 88.94 (monthly low March 2018).