The market wants more evidence to justify getting short USD (today’s US CPI data are in focus but the omens aren’t good, a fall in headline inflation from 3.7% to 3.3% would be ignored and a steady 4.1% core rate would merely support the ‘high for long’ crowd and leave the markets waiting for confirmation that growth is slowing. This doesn’t really raise my hopes of a breakout by EUR/USD this week, ho hum!

The market overall is going to need more evidence of a US slowdown before it buys properly into the idea of a weaker Dollar.