Dollar Index (DXY) levels to watch ahead of CPI
Shortly, US CPI will be released at 8:30am EDT or 13:30 BST.
The inflation data will need to be some distance away from expectations to change the course of the dollar, which has been on the rise in the last week and a half.
Following last week’s formation of big bullish engulfing candle on the weekly chart, the dollar index has remined on the front foot so far this week, amid continued buying of the dollar thanks to that big beat on the NFP data.
At the time of writing, the DXY was holding comfortably above the broken bearish trend and support in the 101.90-102.15 region.
It was also above short-term support around 102.65-70 area, which is now the first line of defense for the bulls. They will need to defend this level to keep the bullish momentum alive.
The next big area of resistance is still quite far around 103.65 to 104.00 (where the 200-day average meets a former pivotal zone), meaning there is further room for the dollar rally before it potentially fades.
By Fawad Razaqzada, market analyst with FOREX.com
- Headline CPI is expected to print +0.1% m/m and +2.3% y/y (vs. 2.5% last)
- Core CPI is seen at +0.2% or +3.2% y/y (unchanged from prev reading).
The inflation data will need to be some distance away from expectations to change the course of the dollar, which has been on the rise in the last week and a half.
Following last week’s formation of big bullish engulfing candle on the weekly chart, the dollar index has remined on the front foot so far this week, amid continued buying of the dollar thanks to that big beat on the NFP data.
At the time of writing, the DXY was holding comfortably above the broken bearish trend and support in the 101.90-102.15 region.
It was also above short-term support around 102.65-70 area, which is now the first line of defense for the bulls. They will need to defend this level to keep the bullish momentum alive.
The next big area of resistance is still quite far around 103.65 to 104.00 (where the 200-day average meets a former pivotal zone), meaning there is further room for the dollar rally before it potentially fades.
By Fawad Razaqzada, market analyst with FOREX.com
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