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Apr 13 - 01:55 PM

EUR/USD - COMMENT-Dollar Index Vulnerable If EUR/USD Breaks Above 1.1950

By Randolph Donney  —  Apr 13 - 11:58 AM

The dollar's bearish reaction to above-forecast U.S. CPI has left it vulnerable, and it could fall to support near its mid-March low of 91.30 if EUR/USD were to clear resistance by 1.1950 and USD/JPY broke key support at 109.

Such dramatic moves might not occur before Thursday's U.S. retail sales report, the next key data on the agenda.

The dollar index has probed below April's prior trough by 92.00 in the wake of the U.S. CPI report nW1N2M6000, which was not sufficiently above forecasts to challenge the assumption that the Fed will keep rates near zero for some time.

Treasury yields had fallen earlier in reaction to J&J's COVID-19 vaccine being put on pause nL1N2M60XL, and slid further after the CPI report.

But EUR/USD's rally has so far held below the 38.2% Fibo of this year's slide at 1.1950 and February's swing low there.
There is more resistance by 1.2000 nL1N2M61CG, but a close above the 1.1950 hurdles would brighten its prospects.

USD/JPY probed below its 30-day moving average at 109.20, with the April low at 109.00 major support tied to the 200-week moving average and the 23.6% Fibo of 2021's rise nL1N2M618Z.

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Source:
Refinitiv IFR Research/Market Commentary

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