- The US February headline Consumer Price Index (CPI) printed +0.2% month-over-month, bang in line with the expectations though lower than the previous +0.5%, indicating the moderate growth in US inflation.
- The dollar fell further as the news that US President Donald Trump had sacked Rex Tillerson as his Secretary of State dominated the markets.
- We should pay close attention to the US February retail sales MoM tonight.
The dollar came under some pressure following the US February CPI and its core measure release on Tuesday 13 March which showed the headline reading of +0.2% MoM was lower than the previous +0.5%, indicating the moderate growth in US inflation, although both of them were bang in line with expectations. Then, the dollar fell further as the news that US President Donald Trump had sacked Rex Tillerson as his Secretary of State dominated the markets while the safe havens like gold and Japanese yen were in favor. We should pay close attention to the US February retail sales MoM tonight.
The dollar index (DXY) broke below its consolidative triangle pattern on the 4 hour chart and the bearish breakout was confirmed by a resumption of decline following a retest. Watch for a potential extension of the decline for third day with downside support/target at lows of last week.
（DXY H4 chart）
Let’s take a look at non-USD currencies now. The euro rose and came close to last week’s highs again after rising for third day. Look for a potential bullish breakout. The British pound cleared the corrective descending line in place for two months. Whether or not we could see the sterling sustain its uptrend will be important to observe. The Aussie dollar reacted off the expected resistance with shallow retracement. Watch for another test of the resistance going forward.
（GBPUSD daily chart）
As to the precious metals, the gold rallied sharply to break out its consolidative range on the week before testing a high of 8 March in Asian session today. A bullish breakout of the high level could indicate an extension of the uptrend, with the pivotal resistance at the descending trend line.
（Gold H4 chart）
By JasonZou —— Chief Analyst of AvaTrade China
Disclaimer: The views and opinions expressed in this article are those of the authors and for the purpose of reference only, and shall not be relied upon by investors in making any trading decisions.