The broader U.S. dollar regains ground after Tuesday’s selloff.
Despite today’s moves, the path of least resistance may be lower for the greenback, especially against some of its top peers.
This article delves into crucial technical levels to monitor for USD/JPY, GBP/USD, and AUD/USD
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US Dollar in Freefall After US CPI, Setups on EUR/USD, GBP/USD, Nasdaq 100, Gold
The U.S. dollar, as measured by the DXY index, inched higher on Wednesday, up about 0.10% to 104.20 following Tuesday’s selloff instigated by softer-than-forecast U.S. CPI numbers. Nonetheless, the greenback’s advance, likely fueled by a modest rebound in U.S. yields, was limited and unimpressive, with markets continuing to position for a Fed pivot in the not-so-distant future.
U.S. producer price figures released in the morning seem to have reinforced the prevailing view that the FOMC is done raising borrowing costs and that its next move will be rate cuts. By way of context, the October PPI declined by 0.5% m-o-m, significantly below the anticipated 0.1% increase, a sign that price pressures are cooling rapidly in the country.
UPCOMING US ECONOMIC REPORTS
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USD/JPY TECHNICAL ANALYSIS
USD/JPY recovered ground after a pullback on Tuesday, recapturing a key technical barrier at 150.90 and approaching its 2022/2023 peak, just shy of the psychological 152.00 level. With prices on an upward trajectory and flirting with a critical threshold, it is important to remain vigilant as Tokyo may step in unexpectedly to prevent further yen weakness and suppress speculative trading behavior.
GBP/USD TECHNICAL ANALYSIS
GBP/USD pulled back on Wednesday, unable to sustain its previous session’s upside breakout, with the exchange rate slipping below the 200-day simple moving average. If losses accelerate in the coming days, primary support appears at 1.2320. Maintaining this floor is imperative to bolster confidence in the bullish stance; any failure to do so could prompt a retreat towards the 1.2200 handle.
AUD/USD TECHNICAL ANALYSIS
AUD/USD extended its recent advance on Wednesday, breaching technical resistance around the 0.6500 mark. With bullish impetus on its side and sentiment on the mend, the pair is likely to consolidate to the upside in the coming days, setting the stage for a possible move towards the 0.6600 handle, which roughly aligns with the 200-day simple moving average. Further up, attention shifts to 0.6680.
