USD Index regains composure near 101.50 ahead of data

• The index looks to revert two straight sessions with losses.
• Decent contention remains near the 101.40 region so far.
• Producer Prices, weekly Claims next on tap in the docket.

The greenback, in terms of the USD Index (DXY), manages to find some buying interest around the mid-101.00s so far on Thursday.

USD Index appears supported near 101.40

The index picks up small upside traction and attempts a tepid bounce off the vicinity of the 101.40 region on Thursday, leaving behind two consecutive sessions with losses.

The daily uptick in the dollar also comes in tandem with a mild recovery in US yields, as market participants continue to assess the recent release of the FOMC Minutes against the backdrop of steady speculation of a 25 bps rate hike at the May meeting.

Later in the NA session, Producer Prices are due along with the usual Initial Jobless Claims.

What to look for around USD

The index seems to have met some decent contention near 101.40 so far.

The recent marked recovery in the dollar has been underpinned by the loss of momentum in the view that the Federal Reserve could make an impasse in its current tightening bias as soon as at the May event.

In favour of a pivot in the Fed’s normalization process, however, still emerges the persevering disinflation, nascent weakness in some key fundamentals and somewhat persistent concerns surrounding the banking sector.

Key events in the US this week: Producer Prices, Initial Jobless Claims (Thursday) – Retail Sales, Industrial Production, Advanced Michigan Consumer Sentiment, Business Inventories (Friday).

Eminent issues on the back boiler: Persistent debate over a soft/hard landing of the US economy. Terminal Interest rate near the peak vs. speculation of rate cuts in 2024. Fed’s pivot. Geopolitical effervescence vs. Russia and China. US-China trade conflict.

USD Index relevant levels

Now, the index is gaining 0.03% at 101.55 and the breach of 101.41 (monthly low April 5) would open the door to 100.82 (2023 low February 2) and finally 100.00 (psychological level). On the other hand, the next resistance level emerges at 103.05 (monthly high April 3) seconded by 103.63 (100-day SMA) and then 105.11 (weekly high March 15).