Will the U.S. dollar experience sharp fluctuations following the U.S. CPI release? Investors should remain vigilant regarding price movements.

Will the U.S. dollar experience sharp fluctuations following the U.S. CPI release? Market participants are on alert for price movements.

14.03.2023

In yesterday’s U.S. currency markets, the dollar faced resistance due to the failure 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 a level not seen in a month.USD/JPY had already fallen below the 20-day moving average 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 watching closely to see if the US dollar recovers following today’s US CPI release.

Among European currencies, the euro/yen fell by more than 3 yen. The pair 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 session, it has been forming lower highs on the daily chart and has entered a downtrend channel. 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 4:00 PM, Swiss producer and import prices and Hungarian industrial production at 4:30 PM, Hong Kong industrial production and producer price index at 5:30 PM, the US NFIB Small Business Optimism Index at 7:00 PM, South African manufacturing production at 8:00 PM, and Canadian manufacturing shipments at 9:30 PM.U.S. Consumer Price Index, at 6:20 a.m. the following day, remarks by U.S. Federal Reserve Governor Bowman, and at 6:45 a.m., New Zealand’s Q4 Current Account Balance. We should be on the lookout for price volatility, as today’s U.S. CPI data could cause the U.S. dollar to fluctuate sharply.