The USD Index fell steeply on Wednesday, giving up all the earlier gains of the day as the FOMC doused hopes of early tapering of their QE program. The FOMC’s position created weakness in the USD, which was evident in Thursday’s 0.32% decline.
The USD Index has managed to take back some of those losses in Thursday’s trading session. This is mostly due to the improvement in the advance GDP numbers from 4.3% to 6.4%, the shortfall from the consensus of 6.8% notwithstanding.
The latest consignment of the initial jobless claims data did not play much of a part in the DXY’s price action, as the 553K registered did not differ much from the 545K consensus or the upward revision of 566K from last week’s numbers.
This allowed for a 0.09% rise in the USD Index on the day.
Technical Levels to Watch
The DXY’s upside move followed from a bounce on the 90.503 support after the bulls quickly rejected the intraday violation. Some follow-through buying is needed to build on this bounce to enable 90.965 to come into focus once more. Additional upside targets include 91.261 and 91.500.
On the other hand, a resumption of downside pressure on the USD Index could put 90.503 at risk. A breakdown of this level allows 90.228 to come into view as the initial downside target, with 89.741 serving as an additional support pivot.
USD Index Daily Chart
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