Dollar Buying Emerges Again after Inflation Data, Yen Extending Fall

Action Insight Mid-Day Report 5-26-23

Dollar Buying Emerges Again after Inflation Data, Yen Extending Fall

While Dollar engaged in retreat for most of the day, some buying appears to emerge again in early US session. A surprising rise in both headline and core PCE inflation is considered to be a key factor driving this resurgence. While it's unsure whether that could result in sustainable rally, the sentiment should stabilize the greenback at least.

Meanwhile, selloff in Yen is taking off again, following rally in US and European benchmark yields, with US 10-year yield breaking 3.8% level in pre-market. The current tone in the markets will likely keep the greenback as the best performer for the week. New Zealand and Australian Dollars will end as the worst, with Yen a distant third. Euro, Sterling, and Swiss Franc are basically still bounded in range against each other.

Technically, CHF/JPY's rally resumes today and hits as high as 155.13 so far. Near term outlook will stay bullish as long as 153.20 support holds. Next target is 100% projection of 137.40 to 147.58 from 140.21 at 156.68. GBP/JPY is also extending recent up trend and breaks above 173 handle. It's a question now whether the development is enough to take EUR/JPY through 151.60 resistance.

In Europe, at the time of writing, FTSE is up 0.24%. DAX is up 0.33%. CAC is up 0.44%. Germany 10-year yield is up 0.005 at 2.529. Earlier in Asia, Nikkei rose 0.37%. Hong Kong HSI dropped -1.93%. China Shanghai SSE rose 0.35%. Singapore Strait Times dropped -0.01%. Japan 10-year JGB yield dropped -0.0078 to 0.422.

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Top Movers | HeatMap | Pivot Points | Pivot Meters | Action Bias | Vol

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.0703; (P) 1.0730; (R1) 1.0752; More...

Intraday bias in EUR/USD is turned neutral first with current recovery, and some consolidations could be seen. But further decline is expected as long as 1.0830 resistance holds. Current fall from 1.1094 is seen as correcting whole up trend from 0.9534. Below 1.0706 will target 1.0515 cluster support, 38.2% retracement of 0.9534 to 1.1094 at 1.0498. On the upside, however, above 1.0830 minor resistance will turn bias to the upside for stronger rebound.

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EURUSD | USDJPY | GBPUSD | USDCHF | AUDUSD | USDCAD

EURJPY | EURGBP | EURCHF | EURAUD | GBPJPY

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Economic Calendar
GMT Ccy Events Actual Forecast Previous Revised
23:30 JPY Tokyo CPI Core Y/Y May 3.20% 3.40% 3.50%
23:50 JPY Corporate Service Price Index Y/Y Apr 1.60% 1.40% 1.60% 1.70%
01:30 AUD Retail Sales M/M Apr 0.00% 0.30% 0.40%
06:00 GBP Retail Sales M/M Apr 0.50% 0.00% -0.90%
12:30 USD Durable Goods Orders Apr 1.10% -0.90% 3.20% 3.30%
12:30 USD Durable Goods Orders ex Transportation Apr -0.20% 0.00% 0.20%
12:30 USD Personal Income M/M Apr 0.40% 0.40% 0.30%
12:30 USD Personal Spending M/M Apr 0.80% 0.40% 0.00% 0.10%
12:30 USD PCE Price Index M/M Apr 0.40% 0.40% 0.10%
12:30 USD PCE Price Index Y/Y Apr 4.40% 3.90% 4.20%
12:30 USD Core PCE Price Index M/M Apr 0.40% 0.40% 0.30%
12:30 USD Core PCE Price Index Y/Y Apr 4.70% 4.60% 4.60%
12:30 USD Goods Trade Balance (USD) Apr P -96.8B -85.6B -84.6B -82.7B
12:30 USD Wholesale Inventories Apr P -0.20% 0.10% 0.00%
14:00 USD Michigan Consumer Sentiment Index May F 58.2 57.7