Well, the calls are coming in now after the UK inflation data this week. In case you missed it:

• Markets move to price in an additional rate hike by the BOE after UK CPI data

This article was written by Justin Low at www.forexlive.com.

• Biden expects Congress to raise the debt ceiling

Well, it’s not done until it is done but then again, this has been an issue that almost always runs down to the wire over the last few decades. I definitely thought there might be more drama for markets and a better potential opportunity to fade the panic, but we’ll see.

This article was written by Justin Low at www.forexlive.com.

Dow futures are also seen up 0.1% and Nasdaq futures up 0.3% at the moment as we start to see light gains on the session now. In trading yesterday, there was a heavy contrast in the mood in Wall Street. The Dow suffered losses once again while the Nasdaq surged higher as it owed much to Nvidia’s strong performance after its solid earnings report.

In the bigger picture, overall sentiment looks to be hinging quite a bit on the US debt ceiling talks at the moment.

Tech stocks though have continued to defy the odds, so that might make things a bit tricky as we look towards the long weekend. But at least for now, there are murmurs that debt ceiling talks might take a more optimistic turn (not too surprising) and that is also perhaps helping to see some mild positivity creep in ahead of US trading later.

This article was written by Justin Low at www.forexlive.com.

The dollar is slightly lower on the day but it doesn’t take away from the gains so far this week, as the greenback continues to sit in the driver’s seat ahead of the US PCE price data later. The technical levels outlined yesterday (as per below) are still very much in play and we have to see if dollar bulls have the appetite to chase any breaks before the long weekend.

Elsewhere, Treasury yields are also just slightly lower on the day with 10-year yields down 2.8 bps to 3.786% at the moment. Meanwhile, equities are keeping steadier with S&P 500 futures now up 0.1% after a more tentative start. European stocks on the other hand have seen the early advance wiped out to be little changed now.

US debt ceiling talks are still clouding markets for the most part, at least in terms of equities sentiment that is. However, there are growing murmurs of positive developments and so we have to see if that will keep up ahead of the X-date – which I would estimate is some time during the first week of June.

Anyway, here are the levels to watch for in dollar pairs as highlighted yesterday and are still applicable now:

• EUR/USD at two month-lows as sellers hold their nerve
• USD/JPY continues to look poised in hunt towards 140.00 mark
• GBP/USD starts to get dragged back into the mud again
• USD/CAD buyers hopeful on latest upside break
• AUD/USD looks towards 0.6500 again in latest downside break
• NZD/USD looks for downside break in fall to lowest levels this year

This article was written by Justin Low at www.forexlive.com.