U.S. Dollar Index Futures Technical Analysis: DX Range-bound Ahead of U.S. Inflation Data

The United States dollar trades relatively flat against other leading currencies on Thursday morning as investors await the U.S. inflation data release later today. Many renowned institutions and banks remain on the sidelines, awaiting data clarifying upcoming interest rate decisions.

The March United States Dollar Index hovered at 102.790 during this writing, losing 0.13% or 0.138. Meanwhile, Wednesday’s session saw the UUP settling at around $27.76, following a 0.02% or $0.01 increase.

The dollar has seen pressure since last week’s labor market stats, which suggested slowed wage growth and other updates indicating contraction within the services sector. These reports encouraged market players to estimate that the Fed won’t have to increase interest rates as quickly as previously forecasted.

CPI Data Prediction

Analysts anticipate the CPI (Consumer Price Index) to lose 0.1% in December and increase by 6.5% Y/Y, versus November’s 0.1% monthly uptick and 7.1% yearly pace (according to Dow). Excluding energy and food prices, analysts expect December’s inflation to reflect a 0.3% increase from last month and 5.7% up within the previous year.

Expected Response

The United States Dollar will likely weaken today if the consumer price index matches or surpasses outlooks. In addition, lower-than-anticipated data will catalyze breaks in Treasury yields, which could make the dollar less desirable.

24Hr Chart Technical Analysis

The daily chart shows a downside primary trend. A move beneath this week’s lowest mark of 102.680 will confirm a downtrend resumption. On the other part, upsides beyond 105.500 will shift the primary trend to the upside.

Meanwhile, uptrends will hit the closest resistance at the longer-term FIB mark at 103.664. The immediate support stands at the 24 May bottom of 101.00.

24Hr Chart Technical Prediction

Trader response around 102.965 will determine the U.S. Dollar Index direction on Thursday. Meanwhile, sustained actions below 102.965 will highlight dominant sellers. Breaching the 102.680 weekly low will intensify the selling momentum.

That may catalyze a new downward acceleration toward 101.00. Nonetheless, strength beyond 102.965 will support bullishness. Enough momentum would push toward 103.664. Overcoming this mark may launch rallies to the 104.090 – 104.423 region.

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