Comment: Forecasting the next move a currency pair will make is the basis of trading foreign exchange. If however it was simple everybody could be earning profits and as the number of money-making traders is approximately just 5% plainly just about all traders should assess the process by which they make their trading judgments.Whilst many forex traders pour over indicators sometimes for several hours at a stretch it in fact can be limiting as it excludes both fundamental and consensus viewpoint from your forex trading system. Understanding what profitable investors feel and Dollar Advances As Strong U.S. Consumer Inflation Backs Fed Rate Hike Hopes post under provides for a experienced opinion of the market.
The U.S. dollar firmed against its major counterparts in the European session on Wednesday, as better than forecast U.S. consumer inflation data in January bolstered hopes that the Federal Reserve will raise interest rates faster than previously anticipated.
Data from the Labor Department showed that U.S. consumer prices increased more than anticipated in the month of January.
The Labor Department said its consumer price index climbed by 0.5 percent in January after edging up by a revised 0.2 percent in December.
Economists had expected consumer prices to rise by 0.3 percent compared to the 0.1 percent uptick originally reported for the previous month.
Excluding food and energy prices, core consumer prices rose by 0.3 percent in January after inching up by 0.2 percent in December. Core prices had been expected to increase by 0.2 percent.
Meanwhile, the Commerce Department report showed that U.S. retail sales unexpectedly decreased in the month of January.
The Commerce Department said retail sales fell by 0.3 percent in January compared to economist estimates for a 0.2 percent uptick in sales.
U.S. weekly jobless claims, producer price index, Empire State manufacturing survey, industrial production and housing market index are due on Thursday, while housing starts, import and export prices and consumer sentiment are due on Friday.
The currency dropped against its major rivals in the Asian session.
Bouncing off from an early 15-month low of 106.84 against the Japanese yen, the greenback rose back to 107.54. The greenback is likely to challenge resistance around the 110.00 level.
Data from the Cabinet Office showed that Japan’s gross domestic product advanced a seasonally adjusted 0.1 percent on quarter in the fourth quarter of 2017.
That was shy of expectations for a gain of 0.2 percent and down from 0.6 percent in the third quarter.
The greenback advanced to a 2-day high of 1.2276 against the euro, from a weekly low of 1.2393 hit at 10:45 pm ET. Further uptrend for the greenback is likely to see it finding resistance around the 1.20 mark.
Flash estimate from Eurostat showed that the euro area economy grew at a slightly slower pace in the fourth quarter.
Gross domestic product climbed 0.6 percent sequentially, following third quarter’s 0.7 percent expansion. The rate came in line with the preliminary flash estimate published on January 30.
The greenback climbed to a 2-day high of 1.3800 against the pound, following a decline to 1.3921 at 10:45 pm ET. If the greenback extends rise, 1.36 is seen as its next resistance level.
The greenback bounced off to 0.9371 against franc, from an 8-day low of 0.9307 seen at 10:45 pm ET. The greenback is seen finding resistance around the 0.96 region.
The greenback climbed to a 2-day high of 0.7242 against the kiwi, 5-day highs of 0.7778 against the aussie and 1.2649 against the loonie, reversing from its early weekly lows of 0.7336 and 0.7890 and a 2-day low of 1.2561, respectively. The next possible resistance for the greenback is seen around 0.70 against the kiwi, 0.76 against the aussie and 1.28 against the loonie.
U.S. business inventories for December will be out at 10:00 am ET.
The material has been provided by InstaForex Company – www.instaforex.com