Will the U.S. Dollar Face Resistance as the CPI Peaks?
12.05.2022
- UK First-Quarter GDP (Preliminary Estimate)
- U.S. Initial Unemployment Insurance Claims
U.S. currencies rose briefly the previous day amid concerns over tightening expectations following yesterday’s high U.S. Consumer Price Index reading of 8.3%. However, the U.S. dollar’s gains were short-lived, and the EUR/USD pair rebounded from 1.050 to 1.057.Since the EUR/USD pair has been fluctuating around the 20-period moving average (MA) on the 4-hour chart since the latter half of last month, we will carefully monitor the situation to see whether it continues to trade within this range for a while or breaks out.
European currencies saw the pound fall even against the already weak Oceania currencies, resulting in a broad decline for the pound. The GBP/AUD pair fell by about 200 pips from 1.775 to 1.756.Following the decline, the pair has been trading near the 200 EMA on the 4-hour chart, searching for direction. We’ll need to watch for any movement during European trading hours and keep an eye on the relative strength between the weak Australian dollar and the pound.
Today’s schedule includes the UK’s first-quarter GDP (flash estimate), industrial production, and trade balance at 15:00 European time; Swiss producer import prices at 15:30; and, during U.S. trading hours, U.S. initial jobless claims and the U.S. Producer Price Index at 21:30,at 23:30, U.S. weekly natural gas inventories; at 24:35, remarks by BOC Deputy Governor Gravel; at 26:00, a U.S. 30-year Treasury auction; and at 29:00, remarks by the President of the San Francisco Fed.We should remain cautious regarding the U.S. dollar’s movements, as resistance has been building due to the CPI peaking out.
Author: Keisuke Sakurai
