The Dollar is in a buying panic and the big question is whether or not it will just keep going up tomorrow after the inflation numbers. Unfortunately I don't know either. But the rally of over 14% since mid-January is impressive, although much of it is justified by the weak Euro.
(source: fxstreet.com)
EURUSD -- 1.0001
At the time of this writing, the Euro is trading just under 1 to 2 pips above parity. Of course there are many market participants who buy Euros here, hedge Dollars longs or defend their digital barriers. Nevertheless, it should only be a matter of time before we see the 0 in front of the decimal point. If not today, then maybe tomorrow with the CPI print, or at a later point in time. But the market certainly does not want to miss the “fun” of seeing the Euro below par.
GBPUSD -- 1.1819
From a technical point of view there is not much support left before the march20 covid lows at 1.1411 and 1.1674 come into play. So it is time to wait for the CPI numbers in this currency pair as well. While I personally think the Dollar rally is extreme, without appropriate levels it is hard to know where to put the stop for Sterling longs.
USDJPY -- 137.17
This currency pair only knows one direction and that is up. I have already burned my fingers on JPY longs and should know better by now. Nonetheless, I maintain my view that the Dollar's much lower real interest rate does not justify its rally against the Yen. But clever people stay out of this currency pair and wait and see. The chart below prints monthly candles and above the 135 (high of 2002) treshold is not much resistance left apart from the round number 140.
Good luck,
Sebbo