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Dollar rebounds after initial CPI-driven drop on key technical levels

After the CPI release, traders pushed the dollar lower, but failed technical breaks led many major pairs to return to, or move through, pre-CPI levels.

Reported · Written up by our desk · Major Pairs

Forexlive reports the U.S. dollar’s initial slide after the CPI release largely fizzled as price action hit key technical levels across major currency pairs. Traders were initially willing to look past aspects of the CPI, with housing accounting for roughly two-thirds of the overall increase, helping drive the first move lower in the dollar.

According to Forexlive, when several of those technical levels could not be breached, the dollar began to reverse, moving back higher. As a result, multiple major pairs have returned to levels where they were trading before the CPI release, and in some cases moved through them.

The outlet also noted that U.S. Treasury yields stayed lower on the day, though they pulled back from session lows, and U.S. stocks remained higher but gave back part of their earlier gains. Forexlive said the post-CPI momentum has weakened as the dollar recovered, yields trimmed their declines, and equities retreated from best levels.

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