The dollar consolidates sideways, and the focus turns to PPI inflation data

In the early trading Thursday, risk sentiment remained sluggish as investors considered the latest trade headlines while staying nervous ahead of the U.S. Bureau of Labor Statistics (BLS) May Producer Price Index (CPI) data and another U.S. 10-year Treasury auction.

Selling interest around the US dollar (USD) remains unabated, with the dollar hitting its two-month low of around 98.25 against other currencies.

While U.S.-China trade tensions have eased, the lingering uncertainty about U.S. President Donald Trump's tariffs on major trading partners continues to upset the market.

Trump said late Wednesday that he is open to extending the deadline for avatradescn.completing trade talks with countries on July 8.

In addition, escalating geopolitical tensions in the Middle East have exacerbated market sentiment.

CBS News Senior White House correspondent Jennifer Jaavatradescn.comcobs reported that U.S. officials have been told that Israel is fully ready to launch an action against Iran.

"The United States expects Iran to retaliate against certain locations in Iraq," Jacobs added.

At the same time, Steve Witkoff, the Middle East envoy to U.S. President Trump, still plans to meet with Iran on Sunday to make a move toward the country's nuclear program.Six rounds of negotiations.

At the same time, the US dollar also felt the pain of weak U.S. inflation data in May. The U.S. Consumer Price Index i (CPI) rose 0.1% in the month, with an annual inflation rate of 2.4%. These two figures are below expectations of 0.2% and 2.5% respectively.

With-expected U.S. CPI data consolidates bets on the Federal Reserve's interest rate cut in September.

CME Group's FedWatch tool now shows that the probability of a 25 basis points (bps) reduction in market pricing is about 62%, avatradescn.compared with 52% before the data is released.

Basic foreign exchange market trends:

Euro/USD in the early trading of Europe on Thursday hovered near a seven-week high above 1.1500, continuing the 0.50% increase on Wednesday.

The GBP/USD fell back to 1.3550 after facing resistance again near 1.3600. The pound was hit by a bigger-than-expected economic contraction in April.

The UK's GDP fell 0.3% in April, after the UK rose 0.2% in March and expected a 0.1% decline, according to data on Thursday. Monthly industrial production and manufacturing production data during the same period were also lower than market expectations.

The USD/JPY held the loss around 144.00, affected by the growing demand for safe-haven yen (JPY). The pair is also under pressure from continued weakness around the dollar.

Bulle market fundamentals:

Gold reversed the situation of the European session falling to the $3,338 area in the early trading session, and is currently in a neutral zone, slightly below the weekly high hit this Wednesday.

Analysis of major currency trends:

Euro: Euro/USD resumed rising from 1.1064, breaking through 1.1494, and intraday bias rose again to the high of 1.1572. The strong resistance there can be seen to bring another decline to continue the recent consolidation pattern. Resolutely breaking through the 1.1404 support level will first turn the intraday bias back to the downward space of 1.1209. However, a decisive breakthrough of 1.1572 will resume overall gains from 1.0176.

GBP: GBP/USD is still hovering within the range below 1.3615, and intraday bias remains neutral. With the 1.3414 support intact, further rebound is still favorable. On the plus side, breaking through 1.3615 will resume the rebound from 1.2099 and aim at the 100% forecast from 1.3813 at 1.3138 to 1.3206 at 1.2099 to 1.3206. On the downside, breaking through the 1.3414 support should confirm the short-term top and bring a deeper correction to 55DEMA (now at 1.3300).

Yen: As range trading continues, the intraday bias of the USD/JPY remains neutral. On the plus side, resistance above 146.27 will indicate that the price movement of 148.64 has been avatradescn.completed as a correction mode. Intraday bias will re-up with resistance at 148.64 and above to resume a rebound from the low of 139.87. However, a firm breakthrough of 142.10 will re-test 139.87.

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