The USD fell away yesterday and we are now a little way off the highs.

The big number of the day was really US CPI and while the monthly figure came in as expected, the annual rate dipped to 2.1% beneath the 2.2% anticipated.

As a result, the DXY weakened and stayed around the 97.00 mark. Similarly, US stock markets showed more weakness and closed into the lows.

The USD Outlook

The DXY is trading at the resistance level turned support just above 97.00.

The major level above is 97.80, but all the focus will be on 97.00. If that drops then we will probably pull back a fair way to the 96.00-20 area, which has previously been big resistance and support.

I feel that 97.00 will hold, but the little pop we had to 97.33 and failure could be viewed as a lower high.

I’m watching this one closely at the moment and will be going with the momentum rather than making an early call.