DOLLAR INDEX : INFLATION DAY
- The market has been trading inside a bullish channel since the beginning of 2024 ; The mid-term trend is then bullish.
- This bullish trend took place as investors' hopes of a quick dovish monetary switch from the FED faded due to US data proving a much more resilient economy than anticipated.
Today's US CPI report is seen as crucial by many.
Indeed, traders and analysts are patiently waiting to see if today's data will confirm dovish hopes raised by the latest NFP data that fell short below estimates, or not.
No change is expected regarding the monthly CPI data, however, the yearly figure is widely expected to display a price pressure slowdown from 3.5% to 3.4%.
If a bigger drop were to be observed today, it would increase the likelihood of the start of the FED’s easing cycle, providing a fresh boost to equity markets while pressuring the US Dollar which could even breakout its current bullish channel.
On the other hand, a sticky or higher inflation rate than estimated would significantly dent the latest bullish appetite on stocks, but also push the US Dollar further up.
Time will tell.
Pierre Veyret, Technical Analyst at ActivTrades
The information provided does not constitute investment research. The material has no been prepared in accordance with the legal requirements designed to promote the independence of investment research and such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
- This bullish trend took place as investors' hopes of a quick dovish monetary switch from the FED faded due to US data proving a much more resilient economy than anticipated.
Today's US CPI report is seen as crucial by many.
Indeed, traders and analysts are patiently waiting to see if today's data will confirm dovish hopes raised by the latest NFP data that fell short below estimates, or not.
No change is expected regarding the monthly CPI data, however, the yearly figure is widely expected to display a price pressure slowdown from 3.5% to 3.4%.
If a bigger drop were to be observed today, it would increase the likelihood of the start of the FED’s easing cycle, providing a fresh boost to equity markets while pressuring the US Dollar which could even breakout its current bullish channel.
On the other hand, a sticky or higher inflation rate than estimated would significantly dent the latest bullish appetite on stocks, but also push the US Dollar further up.
Time will tell.
Pierre Veyret, Technical Analyst at ActivTrades
The information provided does not constitute investment research. The material has no been prepared in accordance with the legal requirements designed to promote the independence of investment research and such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.