USDInd rebounds ahead of Fed Chair Powell’s speech

The USD Index continues to consolidate within 105.093-105.827 range ahead of Fed Chair Powell’s speech today (May 14) and key U.S. macroeconomic data scheduled for release today and tomorrow (May 14-15).
 

Key Macro Readings Investors will be watching today and tomorrow:
 

Today - Tuesday, May 14

• US PPI: Producer prices are expected to rise slightly to 0.3% from 0.2%.
   
• Speech by Fed Chairman Jerome Powell ahead of tomorrow's release of US inflation data
   

Tomorrow - Wednesday, May 15

• US Core CPI: Investors expect both the MoM and YoY core inflation figures, which exclude volatile items such as food and energy, to fall to 0.3% (0.4% - previous) and 3.6% (3.8% - previous), respectively.
   

• US CPI: Headline inflation is expected to remain unchanged MoM at 0.4%, while declining slightly YoY to 3.4% (3.5%-previous).
   

• Retail Sales: Retail sales are expected to fall to 0.4% from 0.7% in the previous period.

Jerome Powell's hawkish comments and / or may potentially lead to downward pressure on indices, gold and silver, while the USD index may experience a boost.

However, a hint of sooner rate cuts and/or lower than expected inflation readings, which may contribute to this, could potentially extend the downward pressure on the USD index, while increasing the attractiveness of gold, silver, and potentially riskier assets such as equities.

From a technical perspective, the USD index's positioning above the 50- and 100-period SMA underscores a bullish medium- and long-term trend.

However, the 21-period SMA is still above the USDInd, pointing to potential near-term headwinds.

The Relative Strength Index (RSI) is in neutral territory, highlighting the market's uncertainty ahead of key economic releases.

On the upside, the 21-period SMA is a key resistance/target level for the USD Index bulls, while on the downside, the 105 level provides immediate support.

A break below this level could drag the USDInd lower towards the 50-period SMA.