The most recent U.S. inflation numbers are out and extra Fed officers have weighed in!

In case you missed it, Uncle Sam simply confirmed that shopper costs have eased from 6.5% to an annualized progress of 6.4% in January.

Factor is, markets had been anticipating a dip to six.2%. Month-to-month costs additionally rose by one other 0.5% in January and hinted {that a} excessive inflation would not be “transitory” as Fed had anticipated.

Increased and stickier inflation numbers solely supported the Fed members’ current remarks about elevating rates of interest additional or conserving their charges excessive for longer.

U.S. Greenback Index (DXY): 4-Hour

U.S. Greenback Index (DXY) 4-Hour Foreign exchange Chart by TradingView

The U.S. greenback index, which just lately broke above a months-long descending pattern line resistance, discovered help from the 102.75 deal with is now buying and selling nearer to 103.50.

Are we taking a look at a reversal within the making?

DXY is at the moment buying and selling inside a potential bullish flag sample simply above the damaged pattern line resistance.

The index can also be buying and selling above the 4-hour chart’s 100 and 200 SMAs, and the 100 SMA closing its hole in opposition to the 200 SMA suggests {that a} bullish SMA crossover could quickly be within the works.

Hold shut tabs on this week’s retail gross sales and PPI releases for clues on DXY’s route.

Sturdy shopper spending and producer worth inflation information would give the Fed extra room to lift its rates of interest additional this yr.

Elevated greenback demand might then bust DXY above its 103.80 earlier highs and push the index to earlier areas of curiosity like 104.80 or 105.50.

But when this week’s headlines encourage risk-taking as an alternative, then the safe-haven greenback might lose pips throughout the board.

DXY might get rejected at 103.75 and head for its earlier lows close to 102.80 or 102.50 pattern line help.

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