Dollar tests resistance after CPI and Trump comments

Hello traders and good morning. As you know, yesterday we got the US inflation data, which did not change and remained at 2.7% on a yearly basis, exactly as expected. The real moves came later, after Trump said that Powell is again too late with cutting rates and that markets should move higher on good news rather than falling. He clearly wants to give the impression that it is the Fed’s fault when markets react negatively to positive data.

Another important topic is Greenland, which remains under the spotlight. Trump has repeated several times that the US must own Greenland and even suggested that the US does not rule out using force to take control. This is one of the reasons why we are seeing a pretty strong recovery in energy prices, and there could be even more upside ahead. Despite this pessimism around potential military actions, stocks are still holding up relatively well for now.

When it comes to the US dollar, this correction still appears to be in play since the end of December. It could be a seven swing move rather than a simple ABC rally, but it is still a counter trend movement. Notice that the dollar is now back at the very important resistance around 99.30, which we highlighted as a potentially interesting reversal area going into 2nd half of this week. A drop out of the corrective channel and a break below 98.67 could be the first trigger for bears to push the dollar lower.
GH