USD index consolidates the recovery near 92.20, US data eyed

The US dollar, when measured by a basket of six major currencies, staged a solid comeback on Thursday, reversing the entire sell-off witnessed yesterday. However, further upside remains capped, as the bulls take a breather awaiting fresh impetus from the US PPI and jobless claims data due to be reported at 1330 GMT today.

The recent price-action seen in the US dollar versus its main competitors is mainly driven by the latest headlines over the Chine-US bond stance.

On Tuesday, the US dollar got aggressively sold-off into the comments from the Chinese officials. The Chinese officials said that they were considering to slow down or halt the purchases of the US Treasuries (USTs), viewing them as less attractive to other assets.

However, the greenback rapidly reversed yesterday’s losses, after the Chinese fx regulator, SAFE, said today that the report on China reducing its UST buys is based on wrong information.

The USD index remained unfazed by the retreat in Treasury yields, now trading marginally higher at 92.18, having stalled its rebound at 92.30 levels.

Technical Levels to watch

The spot faces resistances at 92.36 (6-day tops), 92.50/55 (psychological levels/ 20-DMA) and 93.09 (100-DMA). To the downside, the supports are aligned at 91.95 (10-DMA), 91.66/61 (Jan 10 & 8 low) and 91.47 (4-month lows)