Will the U.S. Dollar See Volatile Moves Following the U.S. CPI Release? Investors Should Watch Price Movements Closely

Will the U.S. Dollar See Volatile Moves Following the U.S. CPI Release? Investors Should Watch Price Movements Closely

14.03.2023

In the previous day’s U.S. currency markets, the U.S. dollar faced resistance due to the failures of two U.S. banks, causing it to fall against the yen. It became the weakest currency. The USD/JPY pair fell by approximately 270 pips from 135.051 to 132.284, reaching its highest level against the yen in a month.The USD/JPY pair had already fallen below its 20-day moving average (MA) on the daily chart following yesterday’s decline and is in the process of forming the right shoulder of a head-and-shoulders pattern on the weekly chart. We will be closely watching today’s U.S. CPI release to see if the U.S. dollar recovers.

Among European currencies, the euro/yen fell by more than 3 yen. The euro/yen dropped from 144.388 to 141.369. It fell well below the 200-period SMA on the 4-hour chart but found support at the daily 200-period SMA and rebounded.Although the pair has rebounded during today’s Asian trading session, it has been forming lower highs on the daily chart and has entered a downtrend line. Therefore, we should remain cautious as the price may target the 130-yen level following a technical correction.

Today’s schedule includes UK employment figures at 16:00, Swiss producer and import prices and Hungarian industrial production at 16:30, Hong Kong industrial production and producer price index at 17:30, the U.S. NFIB Small Business Optimism Index at 19:00,at 8:00 p.m., South African manufacturing output; at 9:30 p.m., Canadian manufacturing shipments and the U.S. Consumer Price Index; at 6:20 a.m. the following day, remarks by Federal Reserve Governor Bowman; and at 6:45 a.m., New Zealand’s fourth-quarter current account balance.We should remain vigilant regarding price movements, as today’s U.S. CPI release could cause the U.S. dollar to fluctuate sharply.