Today, the dollar took a break from the rally it experienced last week when traders pushed it to a three-week high. The dollar surge was boosted by positive economic data, high yields, and the general weakness of its global peers.

Today, the dollar index is little changed as investors turn their attention to stocks, which are faring better than last week. The German DAX index is up almost 2% while US futures point to a positive open.

In the United States, politics is likely to dominate the airwaves this week with Trump unveiling his infrastructure program. Reports show that he will ask states to help contribute more than $200 billion to infrastructure. While this project will be good for some stocks, it could lead to concerns of increased deficits.

The cable is little changed ahead of important inflation data, which is expected tomorrow. This data comes less than a week after the Bank of England’s policy meeting where the committee steered towards faster rate hikes. Traders expect inflation to fall to 2.9% from last month’s 3.0%. A surprise increase in inflation will likely lead to a higher pound because it will be an indicator of higher rates.

The Japanese Yen is up 0.12% against the dollar as investors wait for the GDP reading tomorrow. At 23:50 GMT tomorrow, the Cabinet Office is expected to release the YoY and MoM GDP numbers. Traders expect Q4’s YoY GDP to slow to 0.9% from last month’s 2.5% while the QoQ GDP to slow to 0.2% from 0.6%.

EUR/USD

The EUR/USD pair is currently trading at the 1.2239 level, which is down from its weekly high of 1.2296. As shown below, the pair seems to be forming a cup and handle pattern while trading below the 50 and 14-day moving average. There is a high likelihood that the pair will continue moving downwards, to test the 1.2205 level.

USD/JPY

This year, the dollar has fallen 4.71% against the Japanese Yen. In the past week, the pair has seen little movements but as shown below, it has established a symmetrical triangle, which means the pair is set for a breakout. This breakout could happen tomorrow when Japan releases the GDP data. At this point, it is tough to do a conclusive technical analysis, which means traders should wait for appropriate price action.

AUD/USD

The pair started the year bullishly reaching a high of 0.8137 on 26 January. Since then, the pair experienced a sharp correction that saw it reach a low of 0.7757 on 9 February. The pair is now struggling to recover some of the losses and is currently near the 23.6% Fibonacci retracement level. The most likely scenario is where the pair continues its downward trend to test the 0.7731 support level.