USD is underperforming amid a general improvement in risk moods. Greenback will remain in the center of attention today, especially in the afternoon as the US PPI report for November is scheduled to be released at 1:30 pm GMT. While PPI is usually a second-tier reading without much of an impact on the markets, this data precedes CPI releases in some months, like for example now. As such, traders will try to use it as a hint for the upcoming CPI release (December 13, 1:30 pm GMT). Market expects headline producers' price growth to slow from 8.0% YoY to 7.2% YoY in November and core gauge to move from 6.7% YoY to 5.9% YoY. A downside surprise in PPI would boost odds for a downside surprise in CPI data. Apart from the PPI report, USD may also move on the release of the preliminary University of Michigan consumer sentiment index at 3:00 pm GMT. UoM data for December is expected to show a consumer sentiment index tick higher from 56.8 to 56.9.
Taking a look at EURUSD at H1 interval, we can see that the main currency pair is pulling back following another failed attempt of breaking above the 1.0590 resistance zone. As a result, a double top was painted in the area. Should the pair deepen pullback and drop below a neckline of the pattern in the 1.0440 area, EURUSD may be set for a deeper drop. However, a lot will depend on PPI today, CPI on Tuesday and, of course, Fed decision on Wednesday.
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