Dollar gained traction after the worst week in 2021 but 200DMA caps for now
The dollar extends consolidation above 2 ½ week low after bears were sidelined by stronger than expected US producer price data that improved the mood.
Lower Treasury yields kept the greenback under pressure last week which resulted in the biggest weekly loss this year.
Larger uptrend from early January, driven by expectations for fast US economic recovery remains intact, with pullback from Mar 31 peak (93.45) seen so far as a healthy correction ahead of fresh push higher.
Near-term action found temporary footstep at 91.99 but the downside is expected to remain vulnerable while the action holds below 200DMA (92.35), although conflicting daily indicators lack clearer signals.
Lift above 200DMA would ease bearish pressure and allow for further gains towards next pivotal barrier at 92.54 (Fibo 38.2% of 93.45/91.99 pullback), break of which would generate initial reversal signal.
Caution on repeated (fourth consecutive) failure at 200DMA that would keep bears in play for renewed attack at pivotal 91.81 support (Fibo 38.2% of 89.15/93.45) loss of which would signal bearish continuation.
Fed Chair Jerome Powell in his interview on Sunday expressed optimism that growth and hiring will gain pace in coming months, supported by recent upbeat economic data but reiterated that the Fed is not about to change its current monetary policy.
Investors focus on US inflation data due on Thursday, which would provide fresh signals.
Res: 92.35; 92.54; 92.61; 92.89
Sup: 92.15; 91.99; 91.81; 91.64