Good afternoon, dear traders. Today one of the key events of this afternoon is the release of the monthly Core CPI, published by the U.S. Bureau of Labor Statistics. The indicator shows the change in prices of goods and services with the exception of the most volatile components: food products and electricity. The indicator measures the inflation rate, which in its turn affects the credit policy and general interest rates in the United States. Members of the Federal Open Market Committee (FOMC) consider inflation expectations for limiting its excessive growth rate by tightening the regulation. An increase in base rates leads to the investment inflows into the economy: for this reason the CPI publication may result in a significant boost of the American currency against the most liquid competitors, e.g. Euro.
Here we consider the EUR/USD behavior on the daily chart. The price is located within the consolidation area limited by the triangle. It should be mentioned that the top side of the triangle is more significant, as it is formed by the monthly downtrend line, unlike the weekly support. Thereby, the consolidation has a higher expectation to continue the bearish sentiment. The daily trend channel and the ParabolicSAR value confirm the direction. Additional movement acceleration into the red zone can be produced after the fractal resistance intersection at 1.34815, which is confirmed by the DonchianChannel 30-day support. This mark can be used to open a pending sell order with risk limitation at 1.37060. Stop Loss can be placed at this level, since it is confirmed by ParabolicSAR and DonchianChannel historical values.
Please note that at the moment a bullish divergence of RSI-Bars(13) is observed. Before opening a short position, make sure there is the oscillator resistance breach at 32.01105.
After position opening, Trailing Stop is to be moved after the ParabolicSAR values, or near the next fractal peak. Thus, we are changing the probable profit/loss ratio to the breakeven point.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.