The pressure is on for the dollar with CPI in focus
If the PPI data yesterday is any indication, it is that this is a market that is wanting to get greedy. And unless the CPI data later turns in at a beat, it might be tough to stem the tide we're seeing. That poses a risk for the dollar of getting swept away by the current. And we're starting to see that show up in the technical side of things too.Here are two main ones to watch for a stronger technical breakout in trading this week.The first of which is EUR/USD, which has firmly broken back above 1.0800 for the first time in five weeks. The pair also took out its 200-day moving average (blue line) just under that yesterday. But buyers are now running into key resistance from the 100-day moving average (red line) at 1.0822.If anything else, this will be the make or break spot for the pair as traders will look to the US CPI data later for the next move.A break above that will see the April high of 1.0885 in contention before we start talking about the March highs near 1.0964-81 again.The other key dollar pair that I'd be closely watching is AUD/USD. The pair certainly looks poised to be ready to come up for air, as it begins to creep above the key resistance region of 0.6634-48 currently. The March high of 0.6667 will also be one to watch just in case. But I'd wager a firm daily break above the resistance region highlighted above as being a good platform for an upside break in the pair next.If so, that will offer plenty of room to work with on the way back up. From a technical standpoint, there might not be much resistance until we get closer to 0.6850 and the December high of 0.6871 next.But again, we'll have to get confirmation and vindication from the US CPI (and retail sales) data later today first and foremost.Put together, there are multiple key technical breaks awaiting the dollar ahead of the main event. The pressure is most definitely on. This article was written by Justin Low at www.forexlive.com.
If the PPI data yesterday is any indication, it is that this is a market that is wanting to get greedy. And unless the CPI data later turns in at a beat, it might be tough to stem the tide we're seeing. That poses a risk for the dollar of getting swept away by the current. And we're starting to see that show up in the technical side of things too.
Here are two main ones to watch for a stronger technical breakout in trading this week.
The first of which is EUR/USD, which has firmly broken back above 1.0800 for the first time in five weeks. The pair also took out its 200-day moving average (blue line) just under that yesterday. But buyers are now running into key resistance from the 100-day moving average (red line) at 1.0822.
If anything else, this will be the make or break spot for the pair as traders will look to the US CPI data later for the next move.
A break above that will see the April high of 1.0885 in contention before we start talking about the March highs near 1.0964-81 again.
The other key dollar pair that I'd be closely watching is AUD/USD. The pair certainly looks poised to be ready to come up for air, as it begins to creep above the key resistance region of 0.6634-48 currently. The March high of 0.6667 will also be one to watch just in case. But I'd wager a firm daily break above the resistance region highlighted above as being a good platform for an upside break in the pair next.
If so, that will offer plenty of room to work with on the way back up. From a technical standpoint, there might not be much resistance until we get closer to 0.6850 and the December high of 0.6871 next.
But again, we'll have to get confirmation and vindication from the US CPI (and retail sales) data later today first and foremost.
Put together, there are multiple key technical breaks awaiting the dollar ahead of the main event. The pressure is most definitely on. This article was written by Justin Low at www.forexlive.com.
