Dollar dealt a blow as we move towards final stretch of the week | Forexlive

It seemed like markets were content to wait on the US CPI data and Fed decision next week, so it definitely caught me by surprise that there was quite a modest reaction to the weekly initial jobless claims data here:

The reading was the highest since October 2021 and prompted markets to pare bets of a 25 bps rate hike. The odds for that dropped from roughly 31% to 25% in the aftermath. Even though it could be a sign that traders are looking more confident that the Fed will stay pat, I would argue that a lot will still come down to next week’s inflation report.

Then, we still have USD/CAD which is taking a run at key trendline support around 1.3335 as outlined here yesterday. And then we’re seeing AUD/USD hold just above its 200-day moving average, seen at 0.6689 currently, after the push higher yesterday:

However, buyers still have more work to do to claim the next upside leg breakout with the 100-day moving average (red line) at 0.6739 still the key resistance level to watch.