US Dollar Index off highs, back near 99.50

• DXY runs out of steam in the 99.80/85 on Friday.
• US House Representatives will vote the COVID-19 aid bill today.
• Final US Consumer Sentiment dropped to 89.1 in March.

The greenback failed to extend the bounce above the 99.80 region and it has now returned to the 99.50/40 band when tracked by the US Dollar Index (DXY).

US Dollar Index apathetic on data

The index keeps the inconclusive price action at the end of the week, coming under further downside pressure after breaching the key support at 100.00 the figure on Thursday.

In the meantime, the dollar remains under pressure in response to the recently announced extra monetary stimulus by the Federal Reserve and the government’s $2 trillion coronavirus aid package, which will be debated later on Friday at the House of Representatives following the recent approval by the Senate. Ain addition, Fed’s Powell interview on Thursday brought in extra selling mood to the buck after he stressed the Fed has still room to act.

In the US docket, inflation figures gauged by the PCE showed headline consumer prices rose at a monthly 0.1% in February and 1.8% from a year earlier. Core PCE increased 0.2% inter-month and 1.8% over the last twelve months.

Additional data saw Personal Income expanding more than expected 0.6% MoM during the same period, while Personal Spending expanded 0.2% MoM, in line with forecasts. Further data saw the final U-Mich index dropping to 89.1 for the current month (from 95.9).

What to look for around USD

DXY keeps correcting lower following another rejection of the 103.00 region, or 3-year highs, at the beginning of the week. Further stimulus measures announced by the Fed and the US government lent extra legs to the riskier assets and put the buck under extra downside pressure, helped at the same time by weekly Claims surging to an all-time record. Further downside pressure on the dollar emerged in response to Chief Powell’s downbeat sentiment at his interview on Thursday. In the meantime, all the attention keeps gyrating around the developments from the coronavirus pandemic and the impact on the global economy.

US Dollar Index relevant levels

At the moment, the index is up 0.02% at 99.48 and a breakout of 100.49 (78.6% Fibo retracement of the 2017-2018 drop) would expose 102.99 (2020 high Mar.20) and finally 103.65 (monthly high December 2016). On the other hand, the next support emerges at 98.51 (55-day SMA) seconded by 97.99 (200-day SMA) and then 97.87 (61.8% Fibo retracement of the 2017-2018 drop).