Dollar Index: Vulnerable support ahead of CPI inflation data

Aaron Hill FP Markets

Ahead of this week’s CPI inflation print, the US Dollar Index has moderately bounced back from support at 102.78. Despite benefiting from additional channel support (taken from the low of 103.65) and the Relative Strength Index (RSI) recently shaking hands with oversold space (< 30.00), bullish resolve from the support has been uninspiring.

Lacklustre rebound from support

The lacklustre reply from support could be due to sentiment favouring bears; since topping at 106.13 in late June, sellers have dominated price action, pushing the unit through the 200-day Simple Moving Average (SMA) at 104.21.

Further downside?

Should bulls change gears and extend the pullback from support, resistance at 104.02 calls for attention. This base also shares chart space with channel resistance (extended from the high of 106.13), and the 200-day SMA underlined above. Alternatively, in light of the feeble response from current support and sentiment favouring downside at this point, breaching current support could be on the table this week, with the pendulum swinging in favour of reaching support from 101.78 and 101.01.

Author

Aaron Hill

FP Markets

After completing his Bachelor’s degree in English and Creative Writing in the UK, and subsequently spending a handful of years teaching English as a foreign language teacher around Asia, Aaron was introduced to financial trading,

EUR/USD flat lines below 1.1900; divergent Fed-ECB expectations offer support

The EUR/USD pair struggles to capitalize on the overnight bounce from the 1.1835-1.1830 region and oscillates in a narrow band during the Asian session on Thursday. Spot prices currently trade around the 1.1875 area, remaining nearly unchanged for the day and staying within striking distance of an over one-week high, reached on Tuesday, amid mixed cues.

GBP/USD bullish outlook prevails above 1.3600, UK GDP data looms

The GBP/USD pair gains ground near 1.3635, snapping the two-day losing streak during the early European session on Thursday. The preliminary reading of UK Gross Domestic Product for the fourth quarter will be closely watched later on Thursday. The UK economy is estimated to grow 0.2% QoQ in Q4, versus 0.1% in Q1.

Gold down but not out as focus shifts to more US data

Gold is back in the red near $5,050 early Thursday, having faced strong offers at around the $5,100 mark once again. Buyers keep a close eye on the mid-tier US Jobless Claims data and US-Iran geopolitical developments to regain control.

UK GDP set to post weak growth as markets rise bets on March rate cut

Markets will be watching closely on Thursday, when the United Kingdom’s Office for National Statistics will release the advance estimate of Q4 Gross Domestic Product. If the data land in line with consensus, the UK economy would have continued to grow at an annualised pace of 1.2%, compared with 1.3% recorded the previous year.

The market trades the path not the past

The payroll number did not just beat. It reset the tone. 130,000 vs. 65,000 expected, with a 35,000 whisper. 79 of 80 economists leaning the wrong way. Unemployment and underemployment are edging lower. For all the statistical fog around birth-death adjustments and seasonal quirks, the core message was unmistakable. The labour market is not cracking.

XRP sell-off deepens amid weak retail interest, risk-off sentiment

Ripple (XRP) is edging lower around $1.36 at the time of writing on Wednesday, weighed down by low retail interest and macroeconomic uncertainty, which is accelerating risk-off sentiment.