Despite higher expectations of the interest rate hike by the FOMC, the US currency remains under selling pressure. The US Dollar is only temporarily supported by signals pointing to growing inflationary pressure in the form of the higher January reading of CPI and PPI inflation in the US. Last week's appreciation of the US Dollar has already been completely offset as the US Dollar index has hit the new lows this year and went below the 200-month average EMA on a monthly basis. On the other hand, the EUR/USD pair hit the new highs this year. The impulse for depreciation of the US Dollar was the weaker data on industrial output, which fell by 0.1%in January in monthly terms against the expected increase by 0.2%. Data regarding activity in the industrial sector was mixed. The NY Empire State index fell to 13.1 points in February from 17.7 points, while the Fed's Philadelphia index rose above expectations to 25.8 points from 22.2 points. Even the US job market data in the form of claims for benefits has not help to push USD higher so far.
Let's now take a look at the US Dollar Index technical picture at the H4 time frame. In general, the recent data package is another reason that USD is being still sold across the board. The market is now trying to bounce from the technical support at the level of 88.45 after a failed attempt to break through the black channel dynamic resistance around the level of 90.50.The market conditions are oversold and some kind of a bigger bounce is being expected. The next target is seen at the level of 89.37 - 89.63.
