How to trade the US Inflation data with EUR/USD
|- The US Inflation report and the Core CPI are critical for the Fed and have a considerable impact on the US Dollar.
- The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.
- The EURUSD moved, on average, 34 pips in the 15 minutes after the data release and 50 pips in the following 4 hours
Selling EUR/USD Scenario
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Tradable Negative Trigger: +1.581 deviation (2.4183%) [BUY Pair]
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Key Support Level: 1.1590
This time, if it comes out at higher than expected with a relative deviation of 1.581 or higher(2.4183 or higher in actual terms), the pair may go down reaching a range of 26 pips in the first 15 minutes and 78 pips in the following 4 hours.
1.1690 provided support to the pair on July 9th. The next level to watch is the July 4th trough of 1.1630. 1.1590 was the low point on July 2nd, and the 1.1508 is the 2018 low.
Buying EUR/USD Scenario
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Tradable Positive Trigger: -1.3363 deviation (2.2%) [BUY Pair]
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Key Resistance Level: 1.1850
If it comes out lower than expected at a relative deviation of -1.3363 or less(2.2 or lower in actual terms), the EURUSD may go up reaching a range of 22 pips in the first 15 minutes and 65 pips in the following 4 hours
1.1720 capped the pair in early July and beforehand in late June. 1.1795 was the high point on July 9th. Further above, 1.1850 was the swing high on June 14th.
EUR/USD Levels on the Chart
More data
The Federal Reserve has two mandates: employment and inflation. While jobs are aplenty, inflation is not rising fast enough. However, in recent months, core prices finally picked up, albeit in a gradual manner. Any small change may trigger a significant reaction.
In the last five releases, the EURUSD moved, on average, 34 pips in the 15 minutes after the data release and 50 pips in the following 4 hours. The previous release had no surprise.
Follow the publication of the figure on the economic calendar. Watch out for the data from the Market Impact tool, projecting the potential price changes according to the deviation. Here is the Market Impact Studies Users Guide.
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