How to trade the US Inflation data with EUR/USD

  • The US Consumer Inflation data and especially Core CPI are critical 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 51 pips in the following 4 hours

Selling EUR/USD Scenario

  • Tradable Negative Trigger: +1.581 deviation (2.4183 %) [BUY Pair]

  • Key Support Level: 1.1508

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.

1.1575 was a swing low on August 8th and also in mid-July. The next support is 1.1508 which is the trough of the year. 1.1472 is another noteworthy level from the summer of 2017. 

Buying EUR/USD Scenario

  • Tradable Positive Trigger: -1.3363 deviation (2.2%) [BUY Pair]

  • Key Resistance Level: 1.1750

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.

1.1620 held the pair down on August 95h and also worked as support in late July. 1.1665 separated ranges in mod-July. 1.1720 and 1.1750 are the next levels to watch on the upside, with 1.1750 being a quadruple top.

EUR/USD Levels on the Chart

 

EUR USD technical 4-hour chart August 9 2018

 

More data

The Federal Reserve has two mandates: employment and inflation. Employment has been going up at a satisfactory pace and inflation has finally begun budging. The Fed is watching closely.

See: US inflation preview: holding high ground should be enough for the Fed, currencies set to differ in reactions

In the last five releases, the EURUSD moved, on average, 34 pips in the 15 minutes after the data release and 51 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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