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US Dollar Index meets support around 94.20

  • DXY comes under pressure and retreats to the 94.20 region.
  • US headline CPI rose 5.4% YoY in September, above consensus.
  • The FOMC Minutes are due later in the NA session.

The US Dollar Index (DXY), which gauges the greenback vs. a basket of its main competitors, keeps the selling bias unchanged around the 94.30/20 band midweek.

US Dollar Index now looks to FOMC

Sellers have returned to the market and now drag the index to the negative territory for the first time after two consecutive daily advances, including new 2021 tops at 94.56 recorded on Tuesday.

The move lower in the buck tracks the retracement in US yields, where the 10-year reference hovers around the 1.57% region while the front-end of the curve trades near the 0.34% zone.

The index briefly leapt to the mid-94.00s soon after inflation figures tracked by the CPI rose at an annualized 5.4% in September (vs. 5.3% exp), while the Core print matched estimates at 4.0% YoY. However, the bullish attempt ran out of steam and returned to the 94.30/20 region soon afterwards.

US Dollar Index relevant levels

Now, the index is losing 0.25% at 94.27 and a break above 94.56 (2021 high Oct.12) would open the door to 94.74 (monthly high Sep.25 2020) and then 94.76 (200-week SMA). On the flip side, the next down barrier emerges at 93.77 (20-day SMA) followed by 93.67 (monthly low Oct.4) and finally 92.98 (weekly low Sep.23).

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