USD Holds Onto Gains, Focus On PCE Index

Sentiment remains dominated by mounting fears about slowing economic growth, elevated inflation, supply-chain bottlenecks and a global energy crunch. The U.S. dollar holds onto its gains heading into the weekend with market participants bracing for the Federal Reserve to wind down its stimulus.

Next week’s focus will be on the non-farm payrolls report that is expected to show more than double the job gain from August.

Today we will keep an eye on the U.S. personal consumption expenditures index (PCE) due for release at 12:30 UTC. Bear in mind that the Fed uses the PCE price index as its main measure of inflation. A surprise reading could thus impact the greenback.

EUR/USD: A next crucial target for bears is seen at 1.15. On the upside, we expect a resistance to come in at around 1.1670.

GBP/USD: We see a lower target at 1.3350 now. Breaking however below 1.3280 could see an extended slide towards 1.3180. A current resistance is seen at 1.36.

DAX: Bears, watch out for lower targets at 15000 and 14900. A break below 14800 could generate an even stronger sell signal towards 14400. For a bullish breakout on the other side, we would need to see prices above 15650.

Have a good weekend!

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