U.S. Dollar Could Strengthen Ahead Of Thursday’s PCE Data
Last week was characterized by a weakening U.S. dollar which has pushed both Euro and British pound towards a test of critical resistances. The euro climbed above 1.0830 and surged to a test of 1.0888 from where euro bulls were however unable to turn the tide. At the opening of this week, we see the common currency again below 1.0830, waiting for some directional bias.
The cable touched 1.2710 amid the broad-based dollar weakness but remains sideways and still lacks direction.
The only high-flying trading instrument has been the DAX which shot above 17200 until a high of 17450. Bulls hope for more upward momentum – but only if the index is able to hold above 17000.
This week, traders prepare for the possibility of wild price swings on Thursday with the eagerly awaited release of January’s PCE data. A stronger-than-expected report could propel the U.S. dollar upwards. The core PCE is forecast to have increased by 0.4 percent compared to the previous month and a higher reading could prompt the FOMC to delay the start of its easing cycle and to deliver fewer rate cuts than anticipated.
Let’s be surprised.
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