Forex News: U.S. Consumer Price Index: The Week’s Final Market Mover
Forex News: Yesterday’s session was characterized by bounces at support and resistance, without a clear bias. The U.S. Producer Price Index missed expectations and this weakened the US Dollar in the afternoon.
It looks like the zone between 1.1700 and 1.1713 acts as good support because lately we’ve seen two failed attempts to move bellow it. Also, the pair found solid resistance at 1.1775 and the Moving Average, so the bias is neutral until a clear break of either support or resistance. The U.S. inflation data will play an important role for today’s direction.
A very important economic indicator is released today at 12:30 pm GMT: the U.S. Consumer Price Index, which is one of the main gauges of inflation and measures changes in the price that consumers pay for the goods and services they purchase.
Today’s forecast is a change of 0.2% compared to the previous 0.0% and usually a higher change strengthens the US Dollar. Keep an eye on the CORE version of the CPI (excludes food and energy from calculation), released at the same time and expected to show a change of 0.2% from the previous 0.1%.
An initial drop was reversed yesterday by the worse than anticipated American PPI and afterwards, volatility dimmed and price remained close to 1.3000. Neither side was in clear control but now it seems like the pair has found good support at 1.2950.
During the last few days the pair has bounced twice at 1.2950 and the Relative Strength Index is hovering near the oversold level. These are signs that the bearish momentum is fading and that the buyers are likely to step in sooner rather than later. If 1.3000 can be clearly broken, we expect a move into the 50 period Exponential Moving Average but a lot will depend on the value posted by the U.S. Consumer Price Index.
The Pound has a lacklustre fundamental environment today, without major economic releases, thus the U.S. CPI and the technical aspect will decide the pair’s direction.
Written by: Bogdan Giulvezan
The article above is based on the writer’s 7-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.