Brocker.Org: US Dollar upside stalled near 99.80

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After climbing as high as the 99.80 area, the US Dollar Index (DXY) seems to have met some selling interest and is now receding to the 99.50 region.

US Dollar attention shifted to CPI, Retail Sales

The index has surrendered its daily gains for the time being after clinching fresh tops in the vicinity of 99.80, turning negative for the day and reverting three consecutive advances.

The continuation of the correction lower in the single currency plus a renewed selling mood around the Sterling following the BoE’s Inflation Report gave extra wings to the buck in early trade, although the up move struggled near 99.80.

Anyway, the weekly up in USD move stays unchanged, underpinned by supportive Fedspeak, positive US results and rising bets on a Fed’s rate hike at the June meeting.

Earlier in the session, New York Fed W.Dudley (permanent voter, centrist) said the Fed would normalize the balance sheet in a ‘very careful way’, adding that trade barriers are a ‘dead end’ for the economy.

In the data space, Initial Claims rose 236K (vs. 245K expected) and Producer Prices rose more than estimated 2.5% YoY and 0.5% MoM in April. Looking ahead, April’s inflation figures tracked by the CPI, Retail Sales and May’s advanced Consumer Sentiment figures should keep the attention on the buck.

US Dollar relevant levels

The index is losing 0.01% at 99.49 and a break below 99.26 (20-day sma) would open the door to 99.14 (12-month support line) and then 99.05 (23.6% Fibo of the April-May drop). On the upside, the next hurdle lines up at 99.77 (high May 11) ahead of 99.81 (50% Fibo of the April-May drop) and finally 99.94 (high Apr.21).

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