The dollar appears to be rallying early this week, as markets prepare for the US CPI and FOMC decision.
Can the US currency hold onto its gains against the euro?
Before moving on to ICYMI, I’ve listed potential economic catalysts you need to watch out for this week. Check them out before you start your first trades today!
And now for the main headlines that rocked the markets in the last trading sessions:
Headlines and recent economic data for the market:
Japanese producer prices It rose 5.1% year-on-year in May, slower than the previous gain of 5.9% and the expected increase of 5.6%.
Preliminary orders for Japanese machine tools It fell 22.2% year-on-year in May, sharper than the previous drop of 14.4%.
New Zealand has retail e-card sales A decline of 1.7% m/m in May vs. an estimated rise of 0.3%.
NZIER lowered New Zealand’s GDP forecast to an expansion of 0.6% through March 2024, as estimates of household spending were revised downward
Price action news
It’s a slow start to the week in terms of economic stimuli, leaving traders room to price expectations for this week’s higher-level events.
The dollar is pulling slightly higher against its forex rivals, most notably against the Japanese yen, as market players may prepare their positions ahead of decisions from the Federal Open Market Committee and the Bank of Japan.
In contrast, the US currency is struggling to stay afloat against the Franc, Australian and New Zealand francs.
Bank of England Monetary Policy Committee Member Speech by Man at 2:00pm GMT
The New Zealand visitor arrives at 10:45pm GMT
Use our new file Currency heat map To quickly see a visual overview of the forex market price movement! 🔥 🗺️
EUR/USD for one hour in forex Planned by TV
The pair is still moving downwards on the hourly chart!
The price just dropped to lows around the 1.0735 area before reversing.
Now EUR/USD is testing the resistance at 38.2% Fibonacci, which happens to line up with the short-term area of interest, before resuming the potential slide.
A higher pullback could reach the 50% level near the 1.0750 minor psychological level and today’s pivot point (1.0760) or the 61.8% Fibonacci retracement near the downtrend line and R2 (1.0770).
If any of these are enough to keep gains in check, EUR/USD could fall back to the swing low near S1 (1.0730) or even extend its slide to S2 (1.0720).