Dollar Index Stuck Below Key Resistance Amid Economic Data Uncertainty

The US Dollar has shown marginal gains on Wednesday but remains unable to break above the 200-day Simple Moving Average (SMA), which sits just above 99.00, a level that continues to cap rallies and keep the broader bearish structure intact.

Market volatility remains subdued this week as investors await key economic data releases, including the US Personal Consumption Expenditures (PCE) Price Index on Wednesday and the Jackson Hole summit later in the week.

Strategists at BNY Mellon observe that non-US domiciled investors have stabilized their exposure to the US market, but warn that a sustained deterioration in key indicators would confirm a shift towards reducing structural US exposure.

From a technical analysis perspective, the Dollar Index needs to breach the 200-day SMA and above previous support levels around 99.25-99.40 before bulls can gain confidence and shift their focus to higher targets around 99.70.