The US dollar rose against the major currencies except the Japanese yen last week. It also appreciated against most of the emerging market currencies, with the South African rand, the Brazil real, and the Chinese yuan the notable exceptions. 

Consistent with the recent pattern, the dollar closed the week on a firm note. The dollar has appreciated against the euro and yen each Friday for the past five weeks. In addition, on each Friday over this period, the US interest rate premium rose against Germany and Japan, on two-year and 10-year money.

What happens on Monday's, you ask. The euro has fallen in three of the four Monday's. Last Monday broke the streak. There was not “turn-around Tuesday” for the euro during this period. The euro finished the North American session lower on three of the the past four Tuesday's.  

The euro broke out of the narrow range that had dominated the week in response to the slightly firmer than expected US CPI, where, as we have warned, is being driven higher by rents and medical services. The technical tone is poor. It broke the up trendline we have been monitoring (drawn off the late-July, late-August, and early-September lows), coming in a little below $1.1190 before the weekend. The five-day moving average has slipped below the 20-day. The RSI and MACDs have turned down.  

The 50% retracement of the advance from late July is found near $1.1160, and the euro closed below it. The 61.8% retracement is at $1.1110. Before the euro gets there, it has to overcome the shelf created in early-September in the $1.1120-$1.1145 band. The lower Bollinger Band intersects at the lower end of that shelf. Lastly, we note euro nearly fell to the 200-day moving average (~$1.1145) before the weekend. This average caught the lows in late-August and early-September.  

After advancing against the yen for the past five Friday's, the dollar's has advanced in two of the past four Monday's. The same is true for Tuesdays. Initial support is near JPY101.70. Below there,the JPY101.20-JPY101.40 is more significant. On the upside, the down trendline drawn off the late-May, late-July and early-September highs comes in near JPY 103.20 at the start of next week and JPY102.85 at the end.