Bullish Dollar on Positive CPI Data + Majors Set to Slump in Coming Weeks

The Dollar uptrend is back in play as bullish CPI data fuels a new rally higher. As a result, traders can expect many of the majors to slip in the coming weeks.

This morning’s bullish CPI came out at 0.9% versus the forecast of 0.6%. This lead to an immediate reaction in the Dollar as the DXY is up 0.95% for the day. This move has pushed the price above 94.800 and thus resuming the previous uptrend. The next target is 96.000.

As the long-term bullish trend for the Dollar resumes, traders could expect many of the majors to sell-off in the short term. EURUSD for example is down -0.96% for the day and could fall to the 2020 low of 1.08000. GBPUSD could also fall to monthly support at 1.26800.

Reactions to fundamental news during the pandemic have been quite unusual as bullish news releases rarely had a positive effect on the Dollar. This could be seen with the monthly NFP reports. However, today’s CPI data has proved otherwise. This could be a sign that ‘normal’ trading conditions are near.

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