The dollar index remains buoyed by US consumer prices surpassing expectations.

The dollar index maintained its strong position on Thursday, building on a notable increase of over 1% from the previous day, marking the most significant single-day gain since February 3, 2023. This upward surge was propelled by US inflation data exceeding expectations, which diminished expectations for the Federal Reserve to initiate a cycle of interest rate cuts in June.

This recent uptrend has completely reversed the corrective movement between 104.83 and 103.61, establishing a higher support level around the 103.65 zone. This zone is further reinforced by the presence of the 200-day moving average and the upper boundary of the daily Ichimoku cloud, signaling a continuation of bullish momentum.

Breaking past the 105 mark, the dollar reached a new high for the past five months, setting its sights on the next target at 105.44, which corresponds to the 76.4% Fibonacci retracement level of the downtrend from 107.03 to 100.29. A weekly close above the previous peaks at 104.85/83 would confirm a fresh bullish signal.

Today’s market attention will be drawn to key economic events, including the European Central Bank’s policy decision and US Producer Price Index (PPI) data, along with weekly jobless claims, which are expected to provide further indications for market direction