The U.S. CPI report is up for release, and this could mean another wave lower for the Greenback as weaker price pressures are eyed.
In that case, USD/CHF could find sellers at a nearby area of interest.
Before moving on, ICYMI, today’s Daily Asia-London Session Watchlist looked at the bearish divergence on GBP/AUD’s range resistance. Be sure to check that out to see if there is still a potential play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
- Violence escalates between Israel and Palestine, 35 fatalities reported in Gaza
- U.K. economy contracted 1.5% in Q1 2021 vs. projected 1.6% drop in GDP
- U.K. construction output jumped 5.8% vs. 1.1% forecast, 2.3% previous gain
- U.K. industrial production rose 1.8% vs. projected 1.0% increase
- U.K. preliminary business investment sank 11.8% in March
Upcoming Potential Catalysts on the Economic Calendar:
- BOE Governor Bailey to speak at an online event at 1:00 pm GMT
- U.S. CPI at 1:30 pm GMT
- FOMC member Clarida’s speech at 2:00 pm GMT
What to Watch: USD/CHF
The dollar might be in for another wave lower, as the U.S. CPI report could reflect weaker price pressures for April.Headline inflation could post a meager 0.2% uptick, which would keep it far below the Fed’s target. Weaker than expected results could further undermine tightening expectations, in addition to the jobs data disappointment for the same month.
USD/CHF sellers might be waiting just around the corner, as technical indicators signal that resistance levels are likely to hold. The 100 SMA is below the 200 SMA while Stochastic is already indicating exhaustion among buyers.
The pair could still pull up to the 61.8% Fib that coincides with a short-term falling trend line and the .9100 handle, but it looks like dollar bears might hop in at the 50% Fib near the 200 SMA dynamic resistance.
Do note that risk-off flows have been in play over the past trading sessions, as headlines focus on tensions in the Middle East. With that, the safe-haven U.S. dollar might still be able to catch a bid, especially if inflation reports surprise to the upside.