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Can the dollar maintain its positive momentum this week? Here are the top-tier releases you should watch out for!

CPI report (Sept. 13, 12:30 pm GMT)

U.S. consumer prices rose for another month in July, with headline CPI showing 0.2% growth while the core figure also came in at 0.2%.

Details revealed that higher rent and shelter costs mostly led the price increases. Overall, the numbers pointed to the Fed being comfortable with its rate hike plans.

This week analysts expect to see headline CPI come in at a stronger 0.3% while core inflation is expected to maintain its 0.2% growth.

The latest FOMC statement and minutes showed no big changes in policies or biases, so we can assume that, unless we see dramatic surprises in this week’s inflation data, it’s likely that the Fed will keep calm and carry on with its rate hike schedule.

Retail sales (Sept. 14, 12:30 pm GMT)

Higher purchases of clothing and motor vehicles propped up retail activity in July, which assured investors that the economy started the second half of the year on a strong note.

However, investors didn’t like it that headline and core retail sales growth were revised lower to 0.2% in June.

This week analysts see headline retail sales coming in at 0.4% while core retail sales is expected to slow down from 0.6% to 0.5%.

Uncle Sam will also print a couple of lower-tier economic reports during the same trading session, so y’all should watch out for a bit of profit-taking or other bigger headlines that might take the attention away from the retail sales report!

Last Week’s Price Review

The Greenback overpowered the Swissy, the pound, and the yen and is now at the head of the forex pack (as of 5:00 pm GMT).

Overlay of USD Pairs: 1-Hour Forex Chart
Overlay of USD Pairs: 1-Hour Forex Chart

The Greenback’s price action looks rather chaotic, but we do get a clearer picture if we simply remove GBP/USD and USD/CAD from the overlay.

Overlay of USD Pairs: 1-Hour Forex Chart
Overlay of USD Pairs: 1-Hour Forex Chart

See? It’s pretty clear that the Greenback had a steady start, but found buyers during Tuesday’s London session.

There was no apparent trigger for the Greenback’s Tuesday onslaught. But as mentioned in Tuesday’s London session recap, market analysts were saying that the Greenback was likely enjoying safe-haven demand because of emerging market woes.

The Greenback’s rally then stalled during Tuesday’s U.S. session. And from the looks of it, it seems like market players were abandoning the Greenback to buy up the euro since the Greenback’s rally got capped after Italy’s League issued a statement vowing that that they’ll abide with the E.U.’s budget rules.

Greenback bulls tried to push the Greenback back up again come Wednesday. However, there were signs of returning appetite for risk during Wednesday’s London session, so the Greenback’s would-be rally got cut short.

And things only got worse from there since Bloomberg released a report during Wednesday’s U.S. session, which drove up demand for the pound. And the Greenback was apparently sideswiped since almost all USD pairs began to turn lower after the Bloomberg report was released.

Anyhow, the Greenback continued to take hits on Thursday. There were no fresh catalysts, but as noted in Thursday’s London session recap, market analysts were still blaming the Greenback’s weakness on demand for the pound. Although some market analysts were also saying that traders were also buying up the euro at the Greenback’s expense because of the assurances from the Italian government that they’ll play nice with the E.U.

At any rate, the Greenback would finally regain its mojo come Friday. And Greenback bulls can thank the August NFP report for that since non-farm payrolls printed an upside surprise (201K vs. 193K expected). In addition, wage growth also exceeded expectations since average hourly earnings increased by 0.4% month-on-month (+0.2% expected).

Incidentally, the Greenback’s bullish reaction to the NFP report is the reason why the Greenback is currently at the head of the forex pack.