Title: Volatility Expected in US Dollar as Focus Shifts to Inflation Report
The upcoming week in the financial world is poised to bring an increased level of volatility for the US dollar. Several risk events on the economic calendar have set the stage for potential fluctuations in currency markets.
The much-anticipated November US inflation report, scheduled for release on Tuesday morning, will be one of the key focal points. Experts are closely monitoring these figures as they hold the potential to impact US interest rate expectations.
There has been a shift in sentiment regarding US interest rates, with an increasing number of bets that the Federal Reserve may decide to lower borrowing costs in the coming year. However, this change in stance largely depends on inflation falling towards the targeted 2.0% mark.
Adding to the suspense, the US Bureau of Labor Statistics is set to release November’s consumer price index (CPI) numbers on Tuesday. Preliminary estimates suggest that the headline CPI remained flat last month, displaying an annual rate of 3.2%. Meanwhile, the core gauge is expected to rise by 0.3%, resulting in an unchanged 12-month reading of 4.0%.
The outcome of the CPI report carries significant weight, as it has the potential to impact interest rate expectations and ultimately influence the value of the US dollar in global markets.
Turning our attention to EUR/USD technical analysis, experts observe a bearish signal as the pair slipped below the 200 and 100-day simple moving averages. This development raises the possibility of a retest of the 50-day SMA and trendline support around the 1.0620 mark. On the other hand, technical resistance is expected near 1.0820, with the potential for further gains upon breaching this level.
USD/JPY technical analysis indicates a rebound in the pair, with potential resistance ranging between 147.00 and 147.50. Attention now shifts to the 50-day simple moving average and 149.90 on further strength. Conversely, if bears regain control, initial support rests at 146.00 and 144.50.
GBP/USD technical analysis suggests a downward path after failing to overcome resistance at 1.2720. Experts identify technical support at 1.2500 to 1.2460, with further weakness potentially shifting attention to 1.2340. Overhead resistance is found at 1.2590, and a successful breakthrough may attract new buyers into the market. A rally towards 1.2720 is possible if this resistance barrier is breached, and breaking beyond 1.2800 could pave the way for further upward movement.
As the market waits with bated breath for the release of the US inflation report, traders and investors will be closely monitoring these technical indicators. The outcome of this report holds substantial implications for interest rate expectations and the direction of the US dollar in the coming weeks. Stay tuned for updates on Road Rug Cars as the week unfolds.
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