The US dollar maintained its upward momentum on Friday, with USD/JPY nearing the 160 mark and USD/CHF approaching a new 2026 high. EUR/USD extended its losing streak to four days. Despite a slight miss in headline producer prices, the greenback remained strong, supported by annual PPI hitting its fastest pace since November 2022. Markets are fully pricing in a December rate hike, keeping the near-term outlook for the dollar bullish.
Sticky inflation and a hawkish Federal Reserve continue to bolster the dollar. Fed Governor Christopher Waller emphasized the need for further monetary tightening, even suggesting a 50-basis-point hike. The path of least resistance for the dollar remains upward, with little evidence to suggest easing price pressures.
Next week's key events include Canadian CPI, US retail sales, Nvidia's earnings, and the FOMC minutes. Nvidia's results, expected at $2.49 EPS on revenue of $108.99bn, could impact the broader market. Technical analysis shows USD/CHF breaking above key resistance levels, with 0.8500 as the next target. USD/JPY is testing the 160 handle, where the Bank of Japan has previously intervened.
USD/CHF has cleared the high from October 28, with bulls in control. The next hurdle is 0.8500, supported by Fibonacci extensions. USD/JPY has surpassed several resistance levels, including the 200-day moving average, and is testing 160.00. Key support is now at 158.70-159.00, with potential resistance around 163.00.