The greenback, when tracked by the US Dollar Index (DXY), exchanges gains with losses in the mid-90.00s at the beginning of the week. he index manages well to keep the trade in the upper end of the recent range and close to the key 90.60/70 resistance band on Monday. In the meantime, investors continue to gauge the recent higher-than-expected inflation figures vs. the Fed’s view that the current strength in consumer prices is seen as temporary. It is worth recalling that the headline CPI rose at an annualized 5.0%, the highest level since 2008, while the core reading gained 3.8% from a year earlier.

The index so far survives above the 90.00 neighbourhood, which has emerged as a tough barrier for dollar bears. Higher inflation figures in May failed to ignite a serious bullish attempt in the buck while they also forced yields to recede to multi-month lows well below 1.50%. The outlook for the currency still remains on the negative side and this view is supported by the perseverant mega-dovish stance from the Federal Reserve (until “substantial further progress” in inflation and employment is made) in place for the time being and rising optimism on a strong global economic recovery, which is seen underpinning the risk complex. Now, the index is losing 0.02% at 90.49 and faces the next support at 89.53 (monthly low May 25) followed by 89.20 (2021 low Jan.6) and then 88.94 (monthly low March 2018). On the other hand, a breakout of 90.62 (weekly high Jun.4) would open the door to 90.90 (weekly high May 13) and finally 91.05 (100-day SMA).