Investors await US inflation data and Fed Governor Warsh’s testimony for clues on the central bank’s policy path and USD direction.
The US Dollar Index (DXY) remains slightly lower in early European trading but holds above 101.00 as markets brace for key US consumer inflation figures. The data will influence expectations for Federal Reserve policy, with Fed Governor Kevin Warsh’s congressional testimony also in focus for fresh guidance on borrowing costs.
Technical indicators show a bullish near-term bias, with the DXY above its 50-day Simple Moving Average and the 100.50-100.55 support zone. The Relative Strength Index (RSI) at 60.54 suggests bullish momentum, though the Moving Average Convergence Divergence (MACD) remains slightly negative, indicating cautious upside potential.
Geopolitical tensions, including US-Iran strains and the Strait of Hormuz closure, continue to support elevated crude oil prices, reinforcing inflation concerns. This backdrop may limit downside for the USD as traders await stronger signals before positioning for a potential trend shift.