The dollar was poised just below this year's high against the euro on Wednesday and it struck a five-week peak against the yen ahead of U.S. inflation data, with the prospect a strong number could pressure the Federal Reserve to wind back policy support.
The greenback has enjoyed a lift from last week's impressive U.S. jobs data and from remarks by Fed officials about tapering bond buying and, eventually, raising rates, sooner than policymakers elsewhere.
Six straight sessions of gains against the euro sent the common currency to its lowest since late March on Tuesday. At around $1.1718 through the Asia session, the year's low of $1.1704 is now within range. The inflation data may determine whether it tests those peaks, with a hot reading likely to stoke hike expectations and provide support, while downside surprise could reel those in.
Reaching near to our target 1.1704, the Euro market posture is still negative for short and medium term. The slide back reversal leaves trade positioned to continue attacking under 1.1670. A close under 1.1670 projects to 1.1610. Any near term rebounds will find resistance at 1.1769. Market might start a minor Fibonacci correction upward after that it will turn down again showing new lows.
Resistance 2 1.1755
Resistance 1 1.1737
Support 1 1.1690
Support 2 1.1670