Dollar holds gains and eyes US inflation data for fresh direction signal
The dollar remains within a narrow consolidation for the second day, following bounce from 4 ½ month low (89.50) driven buy month-end flows that boosted demand for the greenback.
Friday morning trading is quiet as investors await US inflation gauge data, closely watched report by US central bankers due in early US session, which would set currency’s direction.
The US core personal consumption expenditures index is expected to jump to 2.9% in April (the index was last time at this level in June 1993) from 1.8% in March, with release in line with forecast or above to signal rising inflationary pressure and lift dollar.
Improved daily studies lack momentum to extend recovery which stays capped by former pivotal Fibo support at 90.16.
Break and weekly close above this level would ease downside pressure and sideline larger bears for stronger correction.
Conversely, Friday’s close below 90.16 would maintain bearish bias and keep the downside at risk.
Res: 90.16; 90.30; 90.51; 90.79
Sup: 89.87; 89.65; 89.50; 89.15