Dollar little changed ahead of European morning trade

<p>The dollar rocked back and forth in the aftermath of the US CPI report but overall, very little has changed. Traders are still pricing in the first rate cut for May 2024 while there is roughly 110 bps worth of rate cuts priced in for the whole of next year currently. That isn't much of a change to before we got the inflation numbers yesterday.</p><p>The greenback ended the day marginally lower and is now trading little changed on the day. The technical outlook remains similar to the start of the week mostly, as traders are eyeing the Fed to be the main catalyst for any moves this week.</p><p>EUR/USD continues to sit in between its 100-day and 200-day moving averages at 1.0754 and 1.0824 respectively. Meanwhile, USD/JPY is consolidating after a bounce off its own 200-day moving average – now seen at 142.45 – from last week. The 100-day moving average at 147.60 is still limiting upside for the pair in the bigger picture.</p><p>Elsewhere, GBP/USD has seen its recent upside stifled by the 61.8 Fib retracement level of the swing lower from July to October, at 1.2720 at the end of last month. The downside is now being held closer to 1.2500 with the 200-day moving average seen at 1.2495.</p><p>Then, there is AUD/USD which continues to trade in and around its own 200-day moving average of 0.6574 as traders are unable to make up their minds over the last one week or so.</p><p>The kiwi is the only slight mover today, after <a href="https://www.forexlive.com/news/westpac-cuts-its-new-zealand-q4-cpi-forecast-to-03-from-06-20231213/" target="_blank" rel="follow">this headline</a> from earlier in the day. Besides that, it is all still to play for as we await the Fed policy meeting statement and decision later.</p>

This article was written by Justin Low at www.forexlive.com.