The US dollar lost some ground today just when it seemed the market was about to test its previous high at 994.04.

The market seems to have started the week with an appetite for risk, and in particular in emerging markets. The Chilean peso gained some ground today, nearly $ 10 against the greenback, as did other market such as the USD/MXN or USD/BRL.

As the market gear up for easter weekend there will be some important economic data from the US and Chile. From the US we can expect:

• Durable goods orders – Forecast 1.1%, Prior -6.1% on March 26
• GDP Growth QoQ – Expected 3.2%, Prior 4.9% on March 28
• PCE Price Index – Expected 2.5%, Prior 2.8% on March 29

The inflation data is the Federal Reserve’s main statistic for price pressure. So, despite the markets in holiday mode and the peso markets closed in the US and Chile, we could see some fireworks on Monday.

Chile will also report two pieces of economic data on Thursday 28:

• Industrial Production – Forecast N/A, Prior 3.6%
• Unemployment – Forecast 8.5%, Prior 8.4%

The mix of this combination of economic data from both the countries in this FX pair will be interesting to determine. That said, by far the two most important pieces of data, and that are likely to have a longer lasting effect, are PCE and GDP from the US.

Technical View

The day chart below for USD/CLP shows a bull trend that seem to be running out of steam. As we are entering a holiday week for many countries we can expect trading volumes to be lighter and that can create distortions in price movements.

However, the market seems to be struggling to get to the 994 level (red line), which is the last peak reached in February this year. A correction, perhaps due to some of the data leading up to Friday, seems plausible.

It would also be met with some stiff resistance from the Ichimoku cloud, I believe in the same way the market bounced of the cloud on March 15. Further highs will also be met with a lot of resistance.

First at 994 as mentioned above, but the next hurdle would be the 1,000 mark. That’s a triple zero big figure, and in any currency, the more the zeros in a big figure the greater the barrier. It’s a psychological aspect. And a lot of pundits are going to look at 1,000 as an opportunity to go short.