It looks like being another lively final trading session of the week this week with more key US data due out on Friday. Once again, moves in FX have been largely dominate by geopolitical updates this week, however traders will turn their focus back to fundamentals on Friday with more key inflation numbers due out of the US. Last week we saw the Core PCE number come in better than expected which has helped keep the dollar supported in the subsequent days as the market has pared back expectations of Federal Reserve rate cuts in light of the data and more hawkish Fed Meeting Minutes last week.
This week has been quiet in terms of US data releases; however, the PPI number is a key part of the Fed puzzle and traders are expecting to see strong moves in the dollar if the data comes in off expectations. The market is pricing in a 0.3% increase in the month-on-month data for both the headline number and the Core and anything +/- 0.1% off that could see some good moves in the market.
The Euro is sitting at good levels for traders to take advantage of any surprises on the data front with strong levels on the daily chart close on both support and resistance that should give traders good entry levels on the data release. Trendline resistance is now coming in just above 1.1800 while support is down near the 1.1725 area and a significant deviation from expectation could see either side break and open up new ranges and swift profits. Anything lower should see that topside resistance break and open the way for a move back towards early February highs above 1.1900 while a stronger surprise could see a move down to the 200 day moving average near 1.1660.
Resistance 2: 1.1927 – February High
Resistance 1: 1.1810 – Trendline Resistance
Support 1: 1.1726 – Trendline Support
Support 2: 1.1660 – 200 Day Moving Average
