US CPI Up Next
Traders will be closely watching today’s US CPI release for February. While a March rate hike is now fully priced in, on the back of recent comments from Fed chairman Powell, the market is now focusing on upside risks. Given events in Ukraine and the impact on global energy prices, inflation risks have shot up once again, with this in mind the market is expecting that the Fed will need to raise rates ahead and above current forecasts.
Today’s US CPI release holds the potential to come in above forecasts, re-sharpening the focus on US rate hike expectations ahead of the March meeting. While the market is not expecting a larger than .25% hike, a strong inflation reading today will likely raise expectations of a more hawkish outlook from the Fed.
Where to Trade US CPI?
DXY
The recent pullback in the Dollar Index creates a good opportunity for fresh longs. Price has traded back down into support around the 97.90 level, which is holding for now. With both MACD and RSI bullish here, the focus is on a continuation of the bullish trend towards the next upside target of 99.88. To the downside, should we slip lower, next support area is 97.90, where we have the channel bottom also.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.