At time of writing the Dollar-Index (DXY) is trying to reclaim the 102.50 treshold. The Euro and the Yen in particular have recently come under pressure again. This week, however, there are still two important dates on the agenda: the ECB interest rate meeting on Thursday and the US CPI figures on Friday.
(source: fxstreet.com)
In view of the latest inflation figures, the ECB must actually react, but Ms. Lagarde has at least not been in a hurry so far. With that, she can actually only surprise on the hawkish side? The CPI numbers, on the other hand, will be interesting because the market will certainly adjust its expectations for next week's FED meeting on Wednesday.
(source: fxdesk.de)
Generally, the impact of countercurrencies on USD crosses could increase next week given the busy central bank meetings (June 16th SNB, BoE and June 17th BoJ). In this respect, we are probably facing quite volatile days that bring both opportunities and risks. I'm sticking with my approach of looking for Dollar shorts for the time being, but will act very cautiously.
In the EURUSD currency pair, we may already know where the journey is headed the day after tomorrow. Should Ms. Lagarde really surprise to the upside, the Euro could start to rise rapidly. I would then no longer short the Euro above the 50 ema (1.0732).
Good luck,
Sebbo