US Dollar Index DXY appears to be supported near 95.50 before US CPI.

• The DXY index appears under pressure around 95.50 during the European session on Wednesday.
• 10-year US Treasury yields remain capped by the 1.80% area.
• US inflation figures measured by the CPI stand out on today’s economic calendar.

The US dollar DXY index, which measures the strength of the dollar against a basket of major currencies, struggles to find a direction in the lower end of recent range near 95.50 level.

DXY Index focuses on the US CPI.

After the sharp decline led by Powell on Tuesday, the DXY index is now trying to regain some composure and rally from the recent lows zone.

In fact, it is worth remembering that The USD intensified its slide Tuesday after Fed Chairman Jerome Powell ruled out any immediate action to reduce the balance sheet. in his testimony before the Senate Banking Committee, adding that the Fed could take between two and four meetings to make such a decision. Powell He also suggested the existence of risks that inflation could take hold and underscored that supply chain disruptions are behind the inflationary pressures.

While the dollar accelerated its losses following Powell’s testimony, US yields held steady near recent highs, showing some lack of conviction to extend the move to the upside for the time being.

The publication of the inflation figures for December, measured by the CPI, will be the most outstanding event during the American session.

Relevant levels of the US dollar DXY index

At the time of writing, the DXY index is gaining 0.05% on the day, trading at 95.63. A break above 96.46 (Jan 4 high) would open the door to 96.90 (Dec 15 high) and 96.93 (Nov 24 high). On the other hand, the next support appears at 95.53 (January 12 low), followed by 95.51 (November 30 low) and 94.96 (November 15 low).