Focus on Today’s UK CPI

*The U.S. dollar remains subdued, awaiting for the U.S. GDP and PCE that is due this week.

*The market focus is on todays UK GDP, which may catalyse the pound sterling.

*API weekly crude data came surprisingly low and boosted oil prices.

Market Summary

Market sentiment remains clouded by uncertainty over Trumps tariff policy, set to take effect on April 2. While the U.S. dollar remains subdued, it has gained slightly from its previous sideways range, with long-term Treasury yields recovering from monthly lows—potentially offering support for the greenback.

Meanwhile, Wall Street is extending its rebound, seemingly ending its recent rout, as capital shifts away from the fading Chinese AI rally sparked by DeepSeek‘s debut. Traders are also bracing for key U.S. economic data, including tomorrow’s GDP release and Fridays PCE reading, both of which could shape expectations for Fed policy.

In forex markets, the pound remains muted ahead of the UK CPI release, with traders awaiting a catalyst to drive movement.

In commodities, oil prices remain on the front foot, with WTI approaching the key psychological $70 mark. The latest API weekly crude stockpile data showed an unexpected draw of 14.6 million barrels, suggesting strong U.S. demand and further bolstering crude prices.

Current rate hike bets on 7th May Fed interest rate decision:

Source: CME Fedwatch Tool

0 bps (86.4%) VS -25 bps (13.6%)

Market Movements

DOLLAR_INDX, H4

The Dollar Index eased slightly, pressured by weak US economic data that dampened confidence in the country‘s economic outlook. The CB Consumer Confidence Index declined from 100.1 to 92.9, falling below expectations of 94.2, while New Home Sales came in at 676K, missing the forecast of 682K. However, the dollar’s long-term trend remains flat, as investors await further clarity on Trumps tariff policy implementation.

The Dollar Index is trading flat while currently near the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 43, suggesting the index might extend its gains after breakout since the RSI rebounded sharply from oversold territory.

Resistance level: 104.55, 105.90

Support level: 103.25, 101.85

GBP/USD，H4

The GBP/USD pair appears to have found support after a technical retracement from its recent four-month high above the 1.3000 mark. While the Pound Sterling remains relatively steady, traders are closely watching today's UK CPI release for clues on the BoE's monetary policy outlook and its implications for the currency. A stronger-than-expected CPI reading could reinforce expectations of a more hawkish BoE stance, potentially driving the pair higher and allowing it to reclaim its recent highs.

After breaking below its uptrend support level, the GBP/USD faces minor technical retracement and is supported at above 1.2900, which provides a neutral signal for the pair. The RSI remains close to the 50 level, while the MACD flows flat close to the zero line, which also provides a neutral signal for the pair.

Resistance level: 1.3000, 1.3105

Support level: 1.2875, 1.2785

Crude Oil, H4

Crude oil prices rose, supported by tight supply concerns after Trumps tariff threats on Venezuelan oil buyers and a larger-than-expected drop in US crude inventories. According to the American Petroleum Institute (API), crude stockpiles fell by 4.6 million barrels, surpassing expectations of a 2.5 million-barrel decline.

Oil prices are trading higher while currently testing the resistance level. However, MACD has illustrated increasing bearish momentum, while RSI is at 51, suggesting the commodity might experience technical correction since the RSI retreated from overbought territory.

Resistance level: 69.30, 70.30

Support level: 68.50, 67.75