The announcement of tapering looked like the beginning of a run to new highs for the Dollar but the friday price action has disappointed. Although EURUSD printed a new low of the year (1.1513) it was not enough to deliver some form of follow through. Yields have been a main driver for sure. 10yr Treasury-Yield collapsed to 1.4530 closing level (now 1.4790 again) but very likely the long Dollar trade is overcrowded as well.
Nevertheless it is too early for bottom calling. With several recent lows above 1.1500 the support zone is well defined. To the upside the 50 ema (1.1657) is coming down pip by pip everday day and offers a good resistance to watch carefully.
Main event of the week will be US CPI numbers on wednesday. The FED mentioned to react flexibly on data with respect to its tapering program. Therefore higher CPIs should help the Dollar whereas lower readings might deliver the reason for at least a short term sell off.
Good luck,
Sebbo