CPI Day: US Dollar Eyes Breakout as Oil Surges

As you know, tensions between the US and Iran are escalating once again. In fact, the US administration stated it would enforce a 20% fee on commercial cargo traveling through the Strait of Hormuz. As a result, crude oil spiked higher and, for now, it’s still on the rise, but it’s slowly approaching an important technical resistance area around $80 to $83, where we may see some slowdown, hopefully still this week.

Also, as you know, today we will get very important . The inflation figures will be released at 2:30 p.m. Central European Time, and if inflation remains high, then of course the Fed may have to act. This was also highlighted yesterday by Fed Governor Christopher Waller.

So, of course, all eyes are on this data. And we know that If we see any continuation lower in US Treasuries, which certainly would not surprise us because the market is clearly in a downtrend and still shows impulsive price action, then weaker Treasury prices mean higher US yields. 

This could send the even higher, possibly breaking out of the triangle that now appears to be nearing completion. It would be nice and important to see a daily close above the current bullish confirmation level around 101.