The Dollar Index (USDIDX) has formed a double top formation, which may indicate a continuation of the downward movement in the coming weeks. Tomorrow's CPI inflation data will be crucial for this trend. If the report is better than expected, we might see a return to dollar gains. However, if the publication matches expectations or is even lower, a continuation of declines is possible. It is also worth noting that a resurgence of CPI inflation to 3.4% year-on-year is expected, compared to 3.2% year-on-year in February.
The dollar has been strengthening in recent weeks, but relatively weakly, considering the strong labor market data and the shifting expectations of the first interest rate cuts possibly to September. At the same time, U.S. bond yields have risen significantly more, to levels last seen in November 2023. In such a case, the dollar still lacks 2-3% to reach these levels.
USDIDX, D1 Interval
Looking at the chart from a technical perspective, it's important to note the forming double top at a medium interval. The Dollar Index attempted to break above the 104,800 zone twice. Currently, the quotes have fallen below 104,000 points. If this movement continues, we can expect the next resistance in the range of 102,300 points. Otherwise, the 104,800 levels still remain the nearest resistance zone.

Source: xStation 5
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