US dollar index finds resistance below 102.00 and retreats

The US dollar is rising modestly across the board on Wednesday. The greenback trimmed gains during the American session but it was still up against many currencies in the market. 

The US dollar index moved with an upside bias since yesterday’s American session. It peaked today at 101.98, the strongest since January 11. Afterward, it pulled back and dropped to 101.50. Currently is hovering around 101.70/75, up 0.40% for the day, about to post the highest close in more than a month. 

Equity prices in Wall Street were rising sharply. The Dow Jones was up 1.65% headed toward another record close after surpassing 21,000. Gold prices were practically unchanged on a volatile day. Earlier the value of the ounce dropped to $1236 (6-day low) and then bounced toward $1250; near the end of the session, it was hovering around $1246, at the same level it closed yesterday. 

US data 

On the economic data front, in the US on Wednesday, the personal income and spending report for January was released. Income rose 0.4% (vs 0.3% expected) and spending 0.2% (vs 0.4% expected). Regarding inflation, the Core PCE Price Index, climbed to the highest since 2012. Later the Markit PMI manufacturing index for February showed a reading of 54.2, while the ISM rose from 56.0 to 57.7, above the 56.0 expected. On the negative side, construction spending fell 1.0% in January,  against expectations of a 0.6% gain. 

DXY levels 

From a technical perspective, if the index manages to hold above 101.75, it could break a key short-term resistance level. The area around 101.70 has been offering resistance since mid-January. 

Above, the next resistance levels might be located at 102.05 and 102.45/50 (Dec 19 & 20 low). On the downside, support now could be seen at 101.50 (American session low) and 100.75 (20-day moving average).