The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against a basket of currencies, initially rose after a higher-than-expected January Consumer Price Index (CPI) data but then reversed course. Inflation beat estimates, causing investors to reassess the Federal Reserve's (Fed) policy path. While Fed Chair Jerome Powell remained non-committal on future interest rate cuts, Treasury yields moved higher, supporting the DXY early in the American session, but later fell below 107.90.

The US Dollar Index attempted to move higher but faced resistance at 108.50, struggling to reclaim the 20-day Simple Moving Average (SMA). The Relative Strength Index (RSI) remains below 50, indicating weak momentum. The Moving Average Convergence Divergence (MACD) histogram continues to show bearish traction.

Immediate support is at the 108.00 level, followed by the key psychological level at 107.50. A sustained move above 108.50 could open the door to 109.00, but selling pressure remains.

Source: FXstreet