US CPI Up Next
Looking ahead to today’s US session and the key focus will be the release of US CPI for March. In light of hawkish comments from various Fed members last week, as well as further hawkish details in the FOMC minutes, today’s data holds the power to drive USD further higher. In terms of the figures, the market is looking for headline CPI to rise to 1.2% from 0.8% prior while core CPI is set to remain unchanged at 0.5%. Given the backdrop, any advance on those projections will be firmly USD bullish. However, it would likely take a surprising undershoot to derail the current USD rally, especially with risk assets under pressure amidst fresh Russia-Ukraine fears. With this in mind, look to stay long USD against higher yielding currencies and EM currencies.
Where to Trade US CPI?
NZDUSD
The pull back in risk appetite over the last fortnight has weighed heavily on NZD. With the Fed looking increasingly hawkish, a stronger-than-expected CPI reading today will likely act as fuel for a break of the bull channel. With the retail market over 70% long, there is plenty of room for a deeper drop here and bears can look for a break of the .6806 level, targeting .6703 initially and .6596 thereafter.
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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.