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After falling below immediate support at 101.80 during the Asian session, the US Dollar Index (DXY) has extended its correction. Following the release of higher-than-expected Initial Jobless Claims for the week ending April 14 and a feeble Philadelphia Fed Manufacturing Survey (April), the USD Index exhibited erratic fluctuations on Thursday.

The US Department of Labor reported for the eleventh consecutive week that unemployment claims exceeded expectations. The economic data revealed that 245K unemployed individuals filed for unemployment benefits, exceeding the consensus and the previous figure of 240K.

As a result of the Federal Reserve's (Fed) decision to raise interest rates, labor market conditions are unquestionably deteriorating on a consistent basis. However, the market continues to anticipate a 25 basis point (bp) rate increase. According to the CME Fedwatch instrument, over 85% of probabilities favor interest rates above 5%.

In the meantime, three consecutive bearish trading sessions on the S&P 500 indicate that investors have supported the theme of risk aversion. Yields on 10-year US Treasuries have fallen below 3.54 percent.

The USD Index is consolidating in a wide range between 101.63 and 102.23 on a two-hour time frame, indicating the absence of a critical catalyst. After the publication of preliminary U.S. S&P PMI data, a power-pack action is anticipated. The Manufacturing PMI is expected to register at 49.0, a decrease from the previous release of 49.9. The Services PMI is anticipated to decrease to 51.5 from 52.6 previously reported.

At 101.85, the 20-period Exponential Moving Average (EMA) intersects with the asset price, indicating an extreme reduction in volatility.

In addition, the Relative Strength Index (RSI) (14) oscillates between 40.00 and 60.00, indicating that investors are awaiting a significant catalyst for a decisive move.

If the asset breaks decisively above the April 17 high of 102.23, investors will drive the asset toward potential resistances from April 10 and March 24 at 102.76 and 103.36, respectively.

Alternatively, a breach of the low of April 5 at 101.41 will cause the asset to fall to the low of April 14 at 100.78. A subsequent decline will expose the asset to psychological support of $100.00.

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