Will the Greenback go back to its downtrend this week? Or can the bulls extend their party for a few more days?
Check out the market-moving themes that might affect USD’s intraweek trends!
CPI reports (Jan 13, 1:30 pm GMT)
- The consumer price index (CPI) rose more than expected in November, as costs of hotel stays, airfares, and apparel jumped
- USD jumped at the news though it also gave up its gains in the next few hours
- Analysts see monthly consumer prices rising by another 0.3% in December while core CPI slows down from 0.2% to 0.1% and annual inflation remaining at a 1.2% growth
- Take note that Fed member have already hinted that they’re willing to let inflation run hot before stepping in with monetary tightening policies
Retail sales (Jan 15, 1:30 pm GMT)
- Retail sales numbers disappointed in November and highlighted the need for fiscal stimulus
- USD didn’t have a sustained reaction to the news since the report was printed just hours before the Fed’s last policy decision for 2020
- Market players expect retail sales to improve from -1.1% to -0.3% in December, with core retail trading only slipping by 0.1% (from -0.9%) and annual retail sales falling from 4.1% to 3.6%
Overall dollar demand
- Focus will turn to the leadership transition in the U.S. and how Trump will handle the economy in the last days of his term
- As seen in last week’s price action, stimulus prospects in the U.S. can limit the dollar’s downtrend against its major counterparts
Technical snapshot
- Stochastic is highlighting the dollar’s “oversold” conditions against the Aussie
- USD/JPY and USD/CHF are approaching overbought levels on the daily time frame
- Daily SMAs are showing short-term demand for the dollar
- Watch out for retracement or reversal opportunities on USD/CAD, USD/CHF, EUR/USD, and USD/JPY
- The dollar was most volatile against the safe-havens and the pound in the last seven days
Missed last week’s price action? Read USD’s price recap for Jan. 4 – 8!