Technical picture to dominate today
City Index May 27, 2015 6:42 PM
<p>The dollar continues to trade with a broad-based bid tone following last Friday’s CPI reading. The greenback was again inspired by a solid durable goods […]</p>
The dollar continues to trade with a broad-based bid tone following last Friday’s CPI reading. The greenback was again inspired by a solid durable goods reading yesterday, despite the disappointing headline number. The core reading came in at considerably stronger levels once the volatile defence and aircraft components had been stripped out, with a strong orders number signalling that a recovery in Q2 US growth is indeed a significant reality. Comments from well-known hawk and FOMC voting member Jeffrey Lacker also inspired the dollar revival, stating that although he has yet to decide on the June rate policy decision, he believed it was evident that inflation was heading back to the 2% target.
USD/JPY is trading above 123 this morning but as equity markets are trading in the opposite direction, some technical commentators suggest that the dollar needs to correct. particularly against the JPY following the achievement of the 123.20 target which had been outlined by Citigroup via the solid support at 118.50.
There are no data releases today with the BoC meeting this afternoon unlikely to see a change in policy or language as recent robust data releases and stronger oil prices are unlikely to change the positive tone set at the last policy meeting.
Support 1.0850-1.0660-1.0520 | Resistance 1.1060-1.1180-1.1325
Support 122.00-121.45-120.60 | Resistance 123.70-124.15-125.00
Support 1.5290-1.5150-1.5090 | Resistance 1.5510-1.5645-1.5700