euromatrixAlthough the market is focused on tomorrow’s release of the FOMC minutes, an event guaranteed to cause a degree of market volatility, it is the release of the CPI and Core CPI numbers earlier in the session which are probably even more important. Of the two releases it is the Core CPI the FED pays the most attention to, and a big influence on the likely timing of any rise in interest rates.

Meantime, the USD appears to have found its mojo once again following last week’s dramatic fall, with the eurodollar bearing the brunt of this resurgence.

The daily chart for the eurodollar is particularly interesting where weakness for the pair started last week with the failure to break and hold above the VPOC (volume point of control) in the 1.1167 price region. Friday’s close below the 100 ma appears to have been the catalyst for a pick up in bearish sentiment for eurodollar which saw the pair close yesterday’s trading session on a wide spread down candle at 1.1076 on good volume.

In today’s trading eurodollar has continued lower, so far on good volume, posting a fresh low at 1.1016 at time of writing, eurodollar bears appear to have the bit between their teeth.

From a CSI perspective the euro is currently heavily oversold across a number of time frames, so we may see a bounce higher both overnight and in tomorrow’s London session, but this may simply be a temporary pause as the market awaits tomorrow’s key data from the US.