2022-12-15 • Updated
The US inflation keeps its momentum and rises to 7.5% as of February 10. The US consumer price index is 0.6% m/m versus 0.4% expected.
Markets are now pricing six rate hikes in 2022 versus five hikes a day before.
The consumer price index presents a change in the price of goods and services purchased by consumers. It is the main index showing the overall inflation in the United States.
As inflation is essential for currency valuation and economic stability, the Federal Reserve must act quickly not to lose control over the situation. Therefore, the main question right now is how rapidly the FED will increase the rate on March 16. Until then, the market will use any hints to predict the value of the upcoming increase.
Us dollar index, daily chart
We can see that the market does not believe that the FED still has control over the situation as, after worse-than-expected CPI results, the US dollar index barely increases and pulls back after. It looks like the price is ready for a trend line breakout and global trend reversal.
EUR/USD, H4 chart
The pair broke through the descending trend line after the ECB hawkish statement, which is now the primary support. Even worse-than-expected CPI data could not send the price below this trend line. Therefore, we assume that the pair will increase rapidly after a short consolidation. Targets for this movement are 1.1480, 1.1530, and 1.1680.
Only FED's extremely hawkish statements and a rapid key rate increase will strengthen the US dollar. Otherwise, the greenback’s uptrend will be over for years.
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Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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Don’t waste your time – keep track of how NFP affects the US dollar and profit!
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