US Data Up Next
Looking ahead today, traders are waiting on the final US data releases of the week with UoM consumer sentiment and inflation expectations both due this afternoon. Following some consolidation over recent days, the Dolar has come under fresh selling pressure here with the DXY in the red as we approach the US open. Yesterday, monthly PPI readings were both seen undershooting forecasts, following on from weaker-than-forecast CPI readings earlier in the week and soft labour market readings a week earlier.
Dovish Fed Expectations
Alongside the recent downturn in US data, Fed easing expectations have risen with traders now pricing in a cut in June with at least one further cut ahead of year end. Fears over the prospect of a US recession this year, as a result of Trump’s tariff war, have taken a central role in markets recently, reflected in the seismic moves we’ve seen across FX markets. If the Dollar takes a fresh leg lower here we can expect recent strength in EUR, JPY and GBP to find fresh momentum leading to trend continuation in coming weeks. With that in mind, any weakness in today’s data could well start the next USD decline into next week where traders will be bracing for a dovish message from the Fed at the March FOMC meeting on Wednesday.
Technical Views
DXY
The sell off in DXY has seen the index breaking down through several key support levels recently. Price is currently stalled at the 103.37 level and with momentum studies bearish, focus is on a break of the level while price holds below the 104.59 level, targeting a move down to 101.91 next.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.