US Dollar Index Flirts With Session Highs Above 91.20

• The DXY jumps higher and tests session highs beyond 91.20.
• Initial US claims beat estimates over the past week.

The dollar manages to gather more steam, leaves previous pessimism behind and managed to hit daily highs above 91.20 when tracking it the US dollar index (DXY) Thursday.

The US Dollar Index held around 91.00

So far, the index reverses Wednesday’s negative session, although it continues to navigate the lower bound of the recent range near the 91.00 zone.

The dollar earns additional buying interest after the ECB’s C. Lagarde ruled out any correlation between the Fed’s policy changes and the ECB’s. Lagarde also said that a reduction in PEPP purchases was not discussed among Council members and that any discussion about the reduction is so far premature. Any reduction in the pace of PEPP purchases will depend on the data.

Returning to the US agenda, weekly claims rose less than expected at 547,000, while the Chicago Fed index improved to 1.71 for the month of March (from -1.20).

What to look for around USD

The dollar manages to regain some composure after bottoming at levels below 91.00 earlier in the week, always amid renewed soft tone in US yields and loss of reflation / trade enthusiasm. US vaccine stocks Also weighing on the dollar are the Fed’s mega-accommodative stance (until “further substantial progress” is made in inflation and employment) and hopes of a strong global economic recovery, all shifting a source of support for the risk complex and the main driver of the probable weakness of the dollar in the second half of the year.

Relevant levels

At the moment, the index is gaining 0.11% to 91.22 and a break above 91.64 (50-day SMA) would open the door to 92.11 (200-day SMA) and finally 93.43 (March 31 high). On the other hand, the next support emerges at 90.85 (weekly low on April 20) before 89.68 (monthly low on February 25) and then at 89.20 (low on January 6, 2021).