USD Rallies on Rising Yields, EZ CPIs in the Spotlight

US DOLLAR SHINES AS TREASURY YIELDS HIT A 14-MONTH HIGH

The US dollar traded higher against all the other G10 currencies on Tuesday and during the Asian session Wednesday. It gained the most versus JPY, SEK, AUD, and NZD, while it eked out the least gains against NOK and CAD.

DJIA — TECHNICAL OUTLOOK

Last week, the Dow Jones Industrial Average index hit a new all-time high, at 33260, and then drifted lower. The index is still moving slightly lower, but because the index continues to trade above a short-term tentative upside support line drawn from the low of March 4th, this move lower could be classed as a temporary correction, before another possible move up. For now, we will take a somewhat positive approach.

HIGHER EZ INFLATION UNLIKELY TO BOOST THE EURO

As for today, the main event on the economic agenda may be Eurozone’s preliminary CPIs for March. The headline CPI rate is expected to have risen to +1.3% yoy from +0.9%, while no forecast is available for the core rate. However, the HICP excluding energy and food rate is anticipated to have stayed unchanged at +1.2% yoy.

EUR/USD — TECHNICAL OUTLOOK

EUR/USD continues to drift lower, while trading below a short-term downside resistance line taken from the high of February 25th. Even if the rate does retrace back up a bit, but struggles to overcome that downside line, another slide could be possible. As long as that downside line stays intact, we will stay bearish with the near-term outlook.

AS FOR THE REST OF TODAY’S EVENTS

During the early European morning, we already got UK’s final GDP for Q4, which was revised up to +1.3% qoq from +1.0%.

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