US Dollar Weakens After Soft PPI Data as Bearish Pressure Builds

The US Dollar Index (DXY) is showing weakness, with price heading toward a third straight weekly decline and a fourth consecutive daily drop, now about 2.6% below its yearly high. The earlier rally was rejected near the 100.15–100.42 resistance zone, which capped the upside move.

Today’s PPI data came in negative, with core PPI m/m at 0.1% (below 0.4% forecast) and headline PPI m/m at 0.5% (below 1.1% forecast). This adds to the recent pressure on the dollar.

Technically, DXY has broken below the 52-week moving average and the yearly open near 98.24 and also moved under the January uptrend line and the 200-day moving average, strengthening the bearish outlook. A weekly close below these levels would confirm continued downside pressure.

On the downside, the next support levels to watch are 97.49, followed by 96.35. On the upside, resistance is seen near the 98.15 area, with 98.95 acting as a key weekly resistance level. A move above 99.49 would be needed to signal a stronger bullish reversal.

DXY Daily Chart

Overall, the short-term risk remains to the downside while price stays below 99.05, with Middle East developments and US inflation data likely to remain the main drivers of market direction in the coming days.