Dollar Still Firm
The US Dollar remains near the week’s highs ahead of tomorrow’s keenly awaited US inflation data. A softening of tensions between the US and China ahead of scheduled trade talks tomorrow has helped lift USD sentiment this week. Traders are now looking ahead to tomorrow’s economic data, which will be the only tier one release we’ve had since the US govt shutdown began. With the Fed having drifted out of the spotlight recently amidst a resurgence of Trump tariff concerns, tomorrow’s data could present fresh USD and cross-market volatility if we get any surprise reading.
US Inflation
While focus at the Fed has shifted more towards labour market data recently, in the absence of any proper updates on that side of the economy, price data will be key for gauging likely Fed action. If we see any fresh downside in consumer price tomorrow, this should cause a fresh uptick in dovish expectations with USD vulnerable to a drop lower accordingly. However, if data surprises to the upside, this could muddy the outlook, pushing USD higher near-term as trader scale back their easing expectations.
US/China Headlines
Finally, trader will be monitoring US/China headline son the back of tomorrow’s meetings. If talks go well, this should help lift USD near-term, amplifying any post-CPI gains. If talks falter, however, this should put pressure on USD, potentially exacerbating any post-CPI losses.
Technical Views
DXY
The rally off the 98.24 level has seen the market breaking back above the bear channel highs with price now testing the 99.15 resistance. If we break higher here, focus will be on a test of the 100.38 marker next. To the downside, 96.63 will be next key support tow watch on any sharp move lower.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.