The US Dollar index was at risk of extending its downturn on yesterday’s rally in the Euro following the European Central Bank press conference. The price has since found support and could be ready for another push higher.
The EURUSD rallied to a high of 1.1917 but gave up around 80 pips of those gains, leading to a recover in the USD. The single currency’s rally was based on the ECB keeping their stimulus measures on hold at current levels. The bank also hinted that the Euro’s recent rally to two-year highs was something that they were watching and tougher talk was expected at the conference to talk it lower.
Today’s U.S. session will see the week finish with key data in the country’s inflation rate. Last week’s figure was 1% and the market expects a rise to 1.2%. A stronger figure could see a boost to the U.S. dollar as it would take some pressure off the Federal Reserve to increase stimulus if their 2% inflation target is in view.
A potential push higher in the U.S. Dollar index would be an important event in markets after the recent dollar bounce took the wind out of key commodities such as oil and gold and could extend their downtrends.
US Dollar Technical Outlook
Yesterday’s move higher in the Euro looked strong enough for a bearish close in the dollar index but the rally faded and the USD has held the support at the top of the price channel. If the USD can get above Wednesday’s high then a test of the 93.82-94.00 levels is possible. The Investing Cube Trading Course is available for traders seeking to learn new technical patterns.
US Dollar Index Daily Chart