Dollar Consolidates Ahead Of CPI Data

* Dollar in consolidation mode ahead of key economic data, investors are advised to continue eyeing on US CPI, which due release later this week for further trading signals.

* Oil prices continue their upward trajectory amid persistent global supply concerns. Ongoing tensions in regions like the Red Sea and geopolitical factors, including Israel-Hamas negotiations, contribute to the complexities of the oil market outlook.

Fundamental Overview

The US Dollar adopts a consolidated stance in anticipation of key economic data, particularly US inflation and retail sales figures. Investors are closely monitoring the Consumer Price Index (CPI) for January, expecting a year-on-year increase of 2.90%, a slight dip from the preceding month. 

The US equity market experiences a modest retreat from all-time highs as investors engage in profit-taking ahead of pivotal economic data releases, with uncertainties lingering over the potential impact of US inflation data on Federal Reserve decisions. 

In the energy sector, oil prices continue their ascent due to global supply concerns and regional tensions, including threats to shipping in the Red Sea and geopolitical complexities surrounding the Israel-Hamas ceasefire negotiations.

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Current rate hike bets on 20th March Fed interest rate decision: 

Source: CME Fedwatch Tool

0 bps (81%) VS -25 bps (19%)  

Economic Calendar

(MT4 System Time)

Source: MQL5  

Market Movements

DOLLAR_INDX, H4

The US Dollar maintains a consolidated stance as investors await crucial data on US inflation and retail sales, seeking clues on potential shifts in the Federal Reserve’s monetary policy. Anticipation surrounds the Consumer Price Index (CPI) for January, with economists expecting a rise of 2.90% year-on-year, down from the previous month’s 3.4%. Investors are advised to closely monitor fresh economic data for nuanced trading signals.

The Dollar Index is flat while currently testing the support level. However, MACD has illustrated diminishing bearish momentum, while RSI is at 54, suggesting the index might be traded higher since the RSI stays above the midline. 

Resistance level: 104.65, 105.70

Support level: 103.85, 102.15

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GOLD，H4

Gold prices remain in consolidation, finding support at various levels as investors eagerly await further fresh US economic data, particularly the upcoming release of US CPI data. This data, scheduled for later in the week, is expected to offer insights into the Federal Reserve’s potential decisions on interest rates, prompting investors to stay vigilant for evolving trading signals.

Gold prices are trading lower following the prior retracement from the resistance level. MACD has illustrated increasing bearish momentum, while RSI is at 41, suggesting the commodity might extend its losses toward support level since the RSI stays below the midline. 

Resistance level: 2035.00, 2055.00

Support level: 2015.00,  2000.00

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CL Oil, H4:

Persistent threats to shipping in the Red Sea, strikes on Russian refineries in Ukraine, and US refinery maintenance, spurring fears upon supply disruption, oil prices continue to rise. Ongoing geopolitical tensions, including the Israel-Hamas ceasefire negotiations, complicate the oil market outlook. Meanwhile, Iraq’s commitment to OPEC decisions and production limits adds another layer of influence to the evolving oil landscape.

Oil prices are trading higher following the prior breakout above the resistance level. However, MACD has illustrated diminishing bullish momentum, while RSI is at 65, suggesting the commodity might experience technical correction since the RSI retreated sharply from overbought territory.

Resistance level: 78.65,  81.20

Support level: 75.20, 71.35