The U.S. dollar weakened against most major peers ahead of today’s closely-watched inflation report.
The CPI report is scheduled for release today at 12:30 UTC. For Federal Reserve taper risk to intensify we will need to see an unambiguously upward surprise to CPI data with headline inflation topping 5 percent YoY. If inflation figures are in line or below forecasts, the dollar could be vulnerable to further losses.
GBP/USD: Above 1.3925, it will be interesting whether sterling bulls are able to clear the 1.3950-barrier, the last hurdle before 1.40. The psychological level at 1.40 could serve as a crucial resistance for bulls in the short-term. Remaining however below 1.3920, our focus shifts to a lower target at 1.3770.
EUR/USD: As long as the pair remains trading above 1.1850, chances are in favor of the bulls with higher targets seen at 1.19 and 1.1950.
Elsewhere, the DAX reached a fresh record high at 15817 this morning and as long as the index holds firmly above 15500, there is nothing in the way of a run for 16000.
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