We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Bearish
Wall Street
Mixed
Gold
Bullish
GBP/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Support and resistance are the cornerstone of technical analysis, making it the foundation that you build your knowledge on. Build a stronger foundation here: https://t.co/yXLaRpl90I https://t.co/MhP7opgk4a
  • Investors in stocks, commodity currencies and energy have been praying for a massive fiscal bazooka to combat the virus effects. It looks like they’re going to get it. Get your market update from @DavidCottleFX here:https://t.co/e2ciGSYftY https://t.co/Udoi5UMJrl
  • The ‘V-shaped’ recovery in USD/JPY just failed to hit its target and is now moving lower again. Important support is now being tested. Get your $USDJPY technical analysis from @nickcawley1 here: https://t.co/koiac0Rxvs https://t.co/CsVsS7PVMV
  • The Australian Dollar has been lifted from its multi-year lows by hopes that global financial authorities can fend off the worst of the #coronavirus‘ effects. Get your $AUDUSD market update from @DavidCottleFX here: https://t.co/GC5pwNbY9S https://t.co/OryobNq7uL
  • Before considering to enter a position, price action must come into contact with the upper or lower channel line at least three times. Learn how to validate a channel here: https://t.co/Rd5hDm7gRo https://t.co/mubPgmDRRY
  • A tidal wave of cash waits to return to virus-battered assets, backstopped by huge stimulus. It is unlikely to deploy until infection slows, whatever the US administration prefers. Get your market update from @DavidCottleFX here: https://t.co/OWOi2HxejD https://t.co/jvMXT7te1h
  • The bullish engulfing candle is one of the forex market’s most clear-cut price action signals for reversals and continuation. Learn more about this price action trading signal here: https://t.co/edEHzyoCJT https://t.co/vHPSW7Vm96
  • It was a big week for GBP/USD as Cable crushed shorts, rallying more than 1,000 pips off of last week’s lows. Get your $GBPUSD technical analysis from @JStanleyFX here: https://t.co/n6vYfe6Gfh https://t.co/zQq74Zzxsv
  • The bull flag pattern is a great pattern to add to a forex trader’s technical arsenal. Explosive moves are often associated with the bull flag. Learn more about the bull flag pattern here: https://t.co/ZNRBvNELeJ https://t.co/CKkWNMLkuw
  • The US Dollar could rise if key ISM, PMI and nonfarm payrolls data causes recession fears to swell and rekindles appetite for the haven-linked Greenback. Get your $USD market update from @ZabelinDimitri here: https://t.co/iTlnxWuSqn https://t.co/brEsDw2a5K
EURUSD Retains Bull Trend as Dollar Risks More Losses on Slowing CPI

EURUSD Retains Bull Trend as Dollar Risks More Losses on Slowing CPI

2014-03-18 07:00:00
David Song, Gregory Marks,
Share:

- U.S. Consumer Price Index to Slow for First Time in Four-Months

- Core Inflation to Hold Steady at Annualized 1.6%

Trading the News: U.S. Consumer Price Index

A slowdown in the headline reading for U.S. inflation may prompt further declines in the dollar as it dampens the interest rate outlook for the world’s largest economy..

Forex-EURUSD-Retains-Bull-Trend-as-Dollar-Risks-More-Losses-on-Slowing-CPI_body_ScreenShot223.png, EURUSD Retains Bull Trend as Dollar Risks More Losses on Slowing CPI

Why Is This Event Important:

Even though the Federal Open Market Committee (FOMC) is widely expected to discuss another $10B taper in March, the central bank remains poised to introduce a ‘qualitative approach’ for monetary policy, and a dovish twist to the forward-guidance may heighten the bearish sentiment surrounding the reserve currency as Fed Chair Janet Yellen remains reluctant to halt the zero-interest rate policy (ZIRP).

Expectations: Bearish Argument/Scenario

Release

Expected

Actual

Producer Price Index (YoY) (FEB)

1.2%

0.9%

Consumer Credit (JAN)

$14.000B

$13.698B

Consumer Confidence (FEB)

80.0

78.1

Slowing input costs paired with the downturn in consumer confidence may prompt businesses to engage in discounting, and a dismal CPI print may trigger a bearish reaction in the USD as it raises the threat for disinflation.

Risk: Bullish Argument/Scenario

Release

Expected

Actual

Advance Retail Sales (MoM) (FEB)

0.2%

0.3%

Average Hourly Earnings (YoY) (FEB)

2.0%

2.2%

Personal Income (JAN)

0.2%

0.3%

However, U.S. firms may raise consumer prices amid the pickup in wage growth along with the resilience in private sector spending, and a stronger-than-expected inflation print may generate a near-term bounce in the greenback as it puts increased pressure on the Fed to normalize monetary policy sooner rather than later.

How To Trade This Event Risk(Video)

Join DailyFX on Demand for LIVE EURUSD SSI Readings During the Event

Bearish USD Trade: Consumer Prices Slow to 1.2% or Lower

  • Need to see green, five-minute candle following the release to consider a short dollar trade
  • If market reaction favors a long EURUSD position, sell pair with two separate position
  • Set stop at the near-by swing low/reasonable distance from entry; look for at least 1:1 risk-to-reward
  • Move stop to entry on remaining position once initial target is hit; set reasonable objective

Bullish USD Trade: Inflation Beats Market Forecast

  • Need red, five-minute candle to favor a long dollar trade
  • Implement same setup as the bearish USD trade, just in reverse

Potential Price Targets For The Release

EURUSD Daily

Forex-EURUSD-Retains-Bull-Trend-as-Dollar-Risks-More-Losses-on-Slowing-CPI_body_Picture_2.png, EURUSD Retains Bull Trend as Dollar Risks More Losses on Slowing CPI

Chart - Created Using FXCM Marketscope 2.0

  • Failure to Close Above 1.3960-70 to Confirm Higher High is in Place
  • Break of Bullish RSI Momentum to Highlight Near-Term Correction
  • Interim Resistance: 1.3960-70 (61.8% expansion)
  • Interim Support: 1.3600 Pivot to 1.3620 (23.6 retracement)

Impact that the U.S. Consumer Price Index has had on EUR/USD during the last release

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

JAN 2014

02/20/2013 13:30 GMT

1.6%

1.6%

+16

+15

January 2014 U.S. Consumer Price Index

Forex-EURUSD-Retains-Bull-Trend-as-Dollar-Risks-More-Losses-on-Slowing-CPI_body_Picture_1.png, EURUSD Retains Bull Trend as Dollar Risks More Losses on Slowing CPI

Price action was limited at the release of US CPI figures for January, but the 16 pip gain at the release held into the daily close. We saw the Euro fall off sharply earlier in the European session as PMI numbers came in generally weaker across the board. It may be the case that we see a generally slow session as market participants await Wednesday’s FOMC event risk. As for insight into this print, it is notable that fuel costs were above average for the month of February as WTI Crude topped $105 a barrel.

--- Written by David Song, Currency Analyst and Gregory Marks

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

To be added to David's e-mail distribution list, please follow this link.

Trade Alongsidethe DailyFX Team on DailyFX on Demand

Looking to use the DailyFX Trade Signals LIVE? Check out Mirror Trader.

New to FX? Watch this Video

Join us to discuss the outlook for the major currencies on the DailyFXForums

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.