USD and inflation: How will latest CPI data bear down on DXY?

The Federal Reserve has the one big gun – the loading of interest rates. For close to a year the Fed has attacked inflation without flinching, lifting rates from near zero to 4.25-4.5%.
The sheer brutality of the front-loading hasn’t been seen since the 1980s. Inflation once thought fleeting is now entrenched across every US supply chain and consumer spending sector.
On Thursday crucial December CPI data lands. Come the late January Fed meeting these numbers will force the FOMC mortar team to ease down to 0.25%, or keep the pressure on the target at 0.5%.

Inflation killing work – over?
Is the Fed’s battle done? US CPI is expected to dip to 6.5% in December from 7.1% a month ago and from 9.1% printed back in the summer.
If that’s the case says Ipek Ozkardeskaya, senior analyst at Swissquote Bank, a slump "could further boost the Fed hawks and help stocks and bonds extend rally, and the dollar extend [its] drop”.
But a smaller easing in December inflation “or a figure higher than last month’s, these latest gains could rapidly vanish”. Which may drive intense USD swithering as Thursday approaches. From just about every angle, US recession risk is intensifying.
Fx Strategist And Finance Consultant At Keirstone, Francis Fabrizi
EUR/USD is retesting the 1.0700 resistance level this morning says Fabrizi. “If price breaks above this level, 1.0740 will likely be the next resistance level it must overcome before pushing towards 1.0800.”
“If price fails to break and hold above 1.0700, I believe it will fall back down towards the 1.0625 support level.”
“Looking at the weekly timeframe, EUR/USD is still in a bearish trend however price seems to be gaining bullish momentum which could indicate a trend reversal. My bias for now is bearish as long as 1.0800 is not breached.”