USD Index maintains the consolidation around 103.50, looks at Jackson Hole

• The index looks mildly bid in the mid-103.00s.
• Markets’ attention shifts to the Jackson Hole event.
• Durable Goods Orders, weekly Claims next on tap in the docket.

The greenback, in terms of the USD Index (DXY), regains some balance and revisits the 103.50 region on Thursday.

USD Index focuses on Jackson Hole gathering

The index regains some composure and manages to partially reverse Wednesday’s marked pullback amidst rising expectation ahead of the Jackson Hole Symposium and the speech by Fed’s J. Powell on Friday.

The recovery in the buck also comes amidst the so far lack of traction in US yields across the curve, which seems to have tempered the weekly decline somewhat despite the Fed’s tighter-for-longer stance appears to still prevail among market participants.

Other than the event in Wyoming, usual weekly Initial Claims are due seconded by the Chicago Fed National Activity Index and Durable Goods Orders for the month of July.

What to look for around USD

The index seems to have now moved into a consolidative phase in the upper end of the range and following recent multi-week tops around the 104.00 zone (August 23).

In the meantime, support for the dollar keeps coming from the good health of the US economy, which seems to have reignited the narrative around the tighter-for-longer stance from the Federal Reserve.

Furthermore, the idea that the dollar could face headwinds in response to the data-dependent stance from the Fed against the current backdrop of persistent disinflation and cooling of the labour market appears to be losing traction as of late.

Key events in the US this week: Jackson Hole Symposium, Durable Goods Orders, Chicago Fed National Activity Index, Initial Jobless Claims (Thursday) - Jackson Hole Symposium, Final Michigan Consumer Sentiment, Chief Powell (Friday).

Eminent issues on the back boiler: Persistent debate over a soft or hard landing for the US economy. Incipient speculation of rate cuts in early 2024. Geopolitical effervescence vs. Russia and China.

USD Index relevant levels

Now, the index is up 0.11% at 103.47 and the breakout of 103.98 (monthly high August 23) would open the door to 104.69 (monthly high May 31) and finally 105.88 (2023 high March 8). On the opposite side, immediate support appears at 103.13 (200-day SMA) followed by 102.30 (55-day SMA) and then 101.74 (monthly low August 4).