Overview

The US dollar was firmer against the yen and euro early today after stronger-than-expected retail sales data overnight showed the US economy is continuing to grow at a moderate pace.

Tonight's March consumer inflation report is the key focus ahead, with market expectations looking for a steady rise in the core rate of 0.2 pct which would ease the annual rate to a still high 2.6 pct from 2.7 pct year-on-year to February.

I think the market is now looking for a USD recovery of sorts, the market hasn't seen the USD get routed for more than a few days over the last couple of years, and so traders could be caught off-guard if the EUR strength continues unabated. I'm certainly in the USD bear camp, but have been bitten too many times to suggest this is the start of the USD meltdown. I suggest we sit aside, and wait for the EUR/USD to pullback to around 1.3500 before re-entering longs.

I'm also seeing a pullback of sorts in the precious metals, particularly if wee gold closing back under 680, and Silver under 13.85.

Please join me later today in my FXStreet webinar at 8.30GMT.

Data for today

UK: CPI

US: CPI

US: Housing Starts

US: Industrial Production

For today:

Standing aside for the moment. For more ideas please email: tradingdesk@pinnacleforex.com