U.S. Dollar Rally Stalls, Focus Turns to U.S. CPI
The U.S. dollar ended Friday’s trading day virtually unchanged against the euro and British pound even after a larger-than forecast U.S. payrolls gain and a jump in average hourly earnings.
This week is from a fundamental perspective much quieter than the previous one but market participants will closely watch the U.S. consumer price report on Wednesday. U.S. consumer prices are expected to show inflation running at the hottest pace in three decades amid supply-chain bottlenecks and higher energy. This expectation could bolster dollar bets ahead of the release.
Let’s take a brief look at the technical picture:
EUR/USD: As long as the euro remains below 1.1580, chances are in favor of bearish moves within the current downtrend channel with the focus remaining on a potential test of 1.15. A significant break above 1.1620 could, however, shift sentiment in favor of the bulls.
GBP/USD: The cable has touched the lower bound of its support area around 1.3415. We now see a lower resistance at around 1.3610. Buyers should keep tabs on a break above 1.3650 whereas sellers aim at 1.3350.
DAX: The index holds above 16000 and bulls have already the 16350-level in sight. However, we also brace for some pullbacks with a current support seen at 15800.
We wish you all a good start to the new week.
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