Will last Friday’s anti-dollar theme extend to this week’s trading?
Or will the Greenback go back to its uptrends this time?
Check out the potential catalysts that might affect the dollar’s prices!
Mid-tier releases
- Headline inflation (Feb 10, 1:30 pm GMT) seen at 0.2% (from 0.4%) in January
- Core and annualized inflation to remain at 0.1% and 1.4% respectively
- Initial jobless claims (Feb 11, 1:30 pm GMT) expected to dip from 779K to 750K
- Preliminary University of Michigan consumer sentiment (Feb 12, 3:00 pm GMT) to improve from 79.0 to 81.0?
Overall dollar demand
- Some traders believe that the dollar’s strength amidst rising equities prices can be partly attributed to the unwinding of a lot of dollar shorts from 2020. This week we’ll see if the USD and the U.S. equities snap back to their inverse correlation
- Fiscal stimulus prospects in the U.S. would *normally* ease the pressure on the Fed to implement expansionary policies. But because the size of Biden’s stimulus deal is expected to raise prices faster than the Fed can raise its rates, “real interest rate” expectations remain low and make the dollar less attractive to investors
- Hints of “lower for longer” interest rates from Fed Chairman Powell’s speech (Feb 10, 7:00 pm GMT) could limit the dollar’s gains
- Positive updates on COVID-19 cases, vaccine rollout, and reopening economies could weigh on the safe-haven dollar
Technical snapshot
- USD/JPY has reached “overbought” Keltner Channel levels on the daily time frame with USD/CHF not too far behind
- The dollar remains in neutral zones against the comdolls and the pound
- EMAs reflect the dollar’s short and long-term bearish trends against the Kiwi and pound
- Watch out for retracement or reversal opportunities on USD/CAD, EUR/USD, and USD/CHF
- The dollar saw the most volatility against the Aussie, Kiwi, pound, and the euro in the last seven days
Missed last week’s price action? Read USD’s price recap for Feb. 1 – 5!
