The coming week could be very crucial for the US dollar, as seen on the US Dollar Index chart that I have attached to this article. As you can see, the market has been banging up against a major downtrend line, and earlier during the previous week we tried to break out with a bit of a failure. Having said that, the 200 day EMA sits just below current trading, and it is worth noting that breaking above that is a relatively strong sign. Furthermore, if we do clear the 93 handle sometime this week, that could open up a move lasting months, as it could set up a run towards 98.
In the upcoming week, we have a couple of major headlines to pay attention to coming out the United States, with the Core CPI figures coming out on Tuesday being a big one. Expected to be 0.4%, something stronger than that could provide a little bit of a catalyst to rally. After that, on Wednesday and Thursday we have the Federal Reserve Chairman Jerome Powell speaking in front of Congress, although one would assume he will not choose to make too many headlines if you can avoid it.
Finally, we get Core Retail Sales on Friday, which of course could have some influence, followed shortly during that session by University of Michigan Consumer Sentiment. Keep in mind that 70% of the United States economy is driven by consumption, so this particular set of indicators could have a bit of an influence.
If we break down below the 200 day EMA and get below the 91.50 level, it is possible that the market could continue the overall descending triangle that has been formed. If that is the case, the market will make another move towards the 90 handle, which losing bad could begin the next leg lower. In other words, the next week should be rather crucial as determining which direction we go for the longer-term move.