Strong US news bolsters the dollar

Chris Beauchamp IG

Better US data caused a brief flurry of weakness in stocks, while the dollar continues its recovery, says Chris Beauchamp, Chief Market Analyst at investing and trading platform IG.

Stronger US data sparks selloff

Investors are bound to be nervous in this period of all-time highs for US stocks, weak seasonal trends and following a speech by Powell that has caused some of the post-Fed dovishness to be wound back. Today’s revised GDP data, claims and durable goods provided a triple-whammy of better news that prompted stocks to head lower, though dip buyers soon appeared. Of course, a sustained pullback over the next two or three weeks would doubtless be welcomed by many, but markets are rarely so obliging.

Dollar squeeze continues

Dollar bulls have had a good couple of weeks, and today’s data has helped the greenback to leap once again. It has really been a question of when, not if, the dollar would stage a rebound, and a further run of good US data might see a sustainable low emerge for the currency.

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Chris Beauchamp

EUR/USD tests nine-day EMA support near 1.1850

EUR/USD remains in the negative territory for the fourth successive session, trading around 1.1870 during the Asian hours on Friday. The 14-day Relative Strength Index momentum indicator at 56 stays above the midline, confirming steady momentum. RSI has eased but remains above 50, indicating momentum remains constructive for the bulls.

GBP/USD consolidates around 1.3600 vs. USD; looks to US CPI for fresh impetus

The GBP/USD pair remains on the defensive through the Asian session on Friday, though it lacks bearish conviction and holds above the 1.3600 mark as traders await the release of the US consumer inflation figures before placing directional bets.

Gold recovers swiftly from weekly low, climbs back closer to $5,000 ahead of US CPI

Gold regains positive traction during the Asian session on Friday and recovers a part of the previous day's heavy losses to the $4,878-4,877 region, or the weekly low. The commodity has now moved back closer to the $5,000 psychological mark as traders keenly await the release of the US consumer inflation figures for more cues about the Federal Reserve's policy path.