The US Dollar finds itself navigating turbulent waters, as the latest Consumer Price Index print sets off a cascade of reactions across various asset classes. The pronounced retreat of the USD is emblematic of the prevailing risk to sentiment, propelling equities skyward while pushing down rates.

Delving into the specifics of the US CPI data, April's headline figure registers a modest 0.3% uptick, falling short of both market expectations and the previous month's reading. Year-over-year, CPI growth aligns with forecasts, clocking in at 3.4%, marginally lower than the preceding month. Stripping away the volatile components of food and energy, the core CPI exhibits a similar trajectory, underscoring the overarching theme of disinflationary pressures reverberating throughout the economy.

The CPI report triggered a decisive breakthrough of the inclined resistance trendline, as evident on the EURUSD chart below:

The rally is unlikely to encounter significant resistance until reaching the 1.0930-1.0950 level; in this area, the upper boundary of a broader bearish channel will be present, where the concentration of sellers is expected with a higher probability.

In tandem with the CPI figures, US Retail Sales data for April paints a somber picture, revealing stagnant growth that fails to meet market projections. The palpable downtrend in retail activity serves as a poignant reminder of the fragility pervading the US economic landscape, potentially emboldening Fed officials to entertain the prospect of interest rate cuts.

Indeed, the confluence of disinflationary signals emanating from the CPI data, coupled with lackluster Retail Sales performance sets the stage for a plausible scenario wherein the Federal Reserve contemplates monetary easing in the near term. Such a policy stance, while exerting downward pressure on the US Dollar, could serve as a boon for European currencies, equities, and Gold, which stand poised to capitalize on the ensuing liquidity dynamics.

Looking ahead, market participants eagerly await insights from key Federal Reserve figures, including Neel Kashkari and Michelle Bowman, as they navigate the nuanced terrain of interpreting inflationary metrics. Additionally, attention turns to the impending release of the National Association of Home Builders Housing Market Index for May, expected to provide further clarity on the state of the housing sector.

Across the pond, the Pound Sterling basks in its winning streak, buoyed by the weakened US Dollar and lingering uncertainty surrounding potential interest rate adjustments by the Bank of England (BoE). With market sentiment leaning towards anticipation of rate cuts at the upcoming June meeting, the Cable finds ample support amidst the prevailing currency dynamics.

Speaking about the technical analysis of the British pound, it's worth focusing on the short-term ascending corridor to determine potential buying targets. As seen below on the chart, the price is very close to reaching the upper boundary of the corridor (1.27), where sellers are likely to attempt to counter the rising trend:

Therefore, similar to the situation with EURUSD, the areas where shorting the pair will result in higher probability of success may reside a bit higher than current levels.