The USD Continues the Consolidation and Waits for the Next Shove

In a recent analysis, the focus is on the current state of the US Dollar (USD) as it remains in a phase of consolidation, awaiting a significant market movement. The article highlights the performance of major currency pairs, specifically the EURUSD, USDJPY, and GBPUSD, from a technical perspective.

Market Overview

As the North American trading session begins, US stocks are showing an upward trend, while yields have decreased after a rise the previous day. Oil prices are also down. A notable development influencing market sentiment is Iran's announcement that it will permit "non-hostile" ships to pass through the Strait of Hormuz, which has contributed to the positive reversal in stocks, yields, and oil prices.

Technical Analysis of Currency Pairs

The article provides a detailed technical analysis of the three major currency pairs. It discusses the factors driving these pairs higher or lower and what conditions are necessary for them to break out of their current trading ranges. The analysis indicates that both buyers and sellers are actively engaged in the market, but there is a growing sense of fatigue among them as they struggle for dominance.

Upcoming Economic Data

Attention is drawn to the upcoming release of US import and export price data, scheduled for 8:30 AM ET. The consensus estimate anticipates a dual increase of 0.5% in prices. The article notes that import prices have remained relatively flat over the past year, with a slight year-over-year decline of 0.1% through January 2026. However, this overall figure conceals significant variations within different categories.

Import and Export Price Dynamics

Fuel imports have seen a sharp decline, particularly petroleum, which has dropped by approximately 16%. In contrast, non-fuel imports have risen by about 1.2%, with notable increases in industrial supplies, capital goods, automotive vehicles, and agricultural products. On the export side, prices have shown a more positive trend, increasing by around 2.6% to 3.3% over the year, with broad gains across various sectors including food, automotive, capital goods, and consumer products.

Inflation Considerations

It is important to note that these price indexes are not adjusted for inflation and serve as a measure for traded goods, similar to the Consumer Price Index (CPI). They are utilized by the Bureau of Economic Analysis to adjust trade data in national accounts. A critical caveat mentioned is that these indexes do not account for tariffs. When tariffs are included, the actual cost of imported goods into the US has been on the rise since late 2025, suggesting that the seemingly flat import price headline may underrepresent the true costs faced by American businesses and consumers at the border.

Conclusion

The article encapsulates the current state of the USD and its major currency pairs, emphasizing the ongoing consolidation phase and the anticipation of future market movements. The upcoming economic data release is expected to provide further insights into the dynamics of import and export prices, which could influence trading strategies moving forward.