News & Analysis at your fingertips.

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.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bullish
Wall Street
Bearish
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
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • EU and UK may reach deal by the end of the week - BBC political editor $GBP #Brexit
  • Forex Update: As of 21:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.59% 🇨🇭CHF: 0.58% 🇪🇺EUR: 0.36% 🇳🇿NZD: 0.05% 🇯🇵JPY: -0.08% 🇬🇧GBP: -0.40% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/nC1lCRvA7M
  • US House clears China delisting bill, sending it forward to President Trump - BBG $USD
  • 🇳🇿 Building Permits MoM (OCT) Actual: 8.8% Previous: 3.6% https://www.dailyfx.com/economic-calendar#2020-12-02
  • Heads Up:🇦🇺 Markit Services PMI Final (NOV) due at 22:00 GMT (15min) Previous: 53.7 https://www.dailyfx.com/economic-calendar#2020-12-02
  • $AUDUSD climbing to its strongest levels since 2018 on positive vaccine news and renewed US fiscal stimulus hopes Next key levels of resistance falling at the July 2018 high (0.7484) and the psychologically imposing 0.7500 mark. $AUD https://t.co/mluudxfVBv
  • Commodities Update: As of 21:00, these are your best and worst performers based on the London trading schedule: Gold: 0.90% Silver: 0.38% Oil - US Crude: -0.45% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/KWAG9XnWYR
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 94.46%, while traders in NZD/USD are at opposite extremes with 72.72%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/sRpA2Wewya
  • Heads Up:🇳🇿 Building Permits MoM (OCT) due at 21:45 GMT (15min) Previous: 3.6% https://www.dailyfx.com/economic-calendar#2020-12-02
  • Euro is up across the board; and while EURUSD's break of 1.2000 and EURGBP's clearing 0.90 are impressive, $EURJPY's run through 126 is the most impressive move from a higher level technical perspective https://t.co/YzTGNrGx6Z
EUR/USD Weakness to Persist on Sticky U.S. Consumer Price Index (CPI)

EUR/USD Weakness to Persist on Sticky U.S. Consumer Price Index (CPI)

2016-04-14 08:00:00
David Song, Strategist
Share:

- U.S. Consumer Price Index (CPI) to Rebound to Annualized 1.0% in March.

- Core Rate of Inflation to Hold Steady at 2.3% for Second-Month; Highest Since May 2012.

For more updates, sign up for David's e-mail distribution list.

Trading the News: U.S. Consumer Price Index

A pickup in the U.S. Consumer Price Index (CPI) accompanied by stickiness in the core rate of inflation may boost the appeal of the greenback and spark a further decline in EUR/USD as it boosts interest-rate expectations.

What’s Expected:

DailyFX Calendar U.S. CPI

Click Here for the DailyFX Calendar

Why Is This Event Important:

Even though the Federal Open Market Committee (FOMC) appears to be in no rush to implement higher borrowing-costs, stronger price growth may put increased pressure on the central bank to further normalize monetary policy especially as the U.S. economy approaches ‘full-employment.’

Expectations: Bullish Argument/Scenario

Release

Expected

Actual

Consumer Credit (FEB)

$14.900B

$17.217B

Average Hourly Earnings (YoY) (MAR)

2.2%

2.3%

Personal Income (FEB)

0.1%

0.2%

Signs of stronger wage growth paired with the expansion in private-sector lending may encourage U.S. firms to boost consumer prices, and a strong CPI reading may spark a bullish reaction in the greenback as it fuels speculation for higher interest rates.

Risk: Bearish Argument/Scenario

Release

Expected

Actual

Advance Retail Sales (MAR)

0.1%

-0.3%

Producer Price Index (YoY) (MAR)

0.3%

-0.1%

NFIB Small Business Optimism (MAR)

93.5

92.6

Nevertheless, waning confidence along with the slowdown in household spending may drag on price growth, and a softer-than-expected inflation report may weigh on the dollar as it increases the Fed’s scope to further delay its normalization cycle.

How To Trade This Event Risk(Video)

Bullish USD Trade: CPI Report Highlights Sticky U.S. Price Growth

  • Need red, five-minute candle following the print to consider a short trade on EUR/USD.
  • If market reaction favors a bullish dollar trade, sell EUR/USD with two separate position.
  • Set stop at the near-by swing high/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 limit.

Bearish USD Trade: Headline & Core Rate of Inflation Fail to Meet Market Forecast

  • Need green, five-minute candle to favor a long EUR/USD trade.
  • Implement same setup as the bullish dollar trade, just in the opposite direction.

Potential Price Targets For The Release

EURUSD Daily

EUR/USD Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • EUR/USD stands at risk for a larger pullback as the Relative Strength Index (RSI) fails to preserve the bullish formation carried over from February, with the next key downside region of interest coming in around 1.1090 (50% retracement) to 1.1110 (50% retracement).
  • Interim Resistance: 1.1510 (50% retracement) to 1.1520 (61.8% expansion)
  • Interim Support: Interim Support: 1.0380 (78.6% expansion) to 1.0410 (61.8% expansion)

Check out the short-term technical levels that matter for USDOLLAR heading into the report!

Avoid the pitfalls of trading by steering clear of classic mistakes. Review these principles in the "Traits of Successful Traders" series.

Impact that the U.S. Consumer Price Index report has had on EUR/USD during the previous month

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

FEB 2016

03/16/2015 12:30 GMT

0.9%

1.0%

-27

+126

February 2016 U.S. Consumer Price Index (CPI)

EUR/USD Chart

The U.S. Consumer Price Index (CPI) narrowed to an annualized 1.0% from 1.4% in February, while the core rate of inflation unexpectedly advanced to 2.3% from 2.2% during the same period to mark the highest reading since May 2012. A deeper look at the report showed prices for apparel increased 1.6% in February to lead the advance, with the cost of medical care increasing another 0.5%, while transportation costs slipped another 2.5% after contracting 0.8% in January. EUR/USD tracked lower following the report, with the pair slipping to a session low of 1.1057, but the fresh developments from the Federal Reserve interest-rate decision sparked a meaningful advance in the exchange rate as the euro-dollar ended the day at 1.1222.

Read More:

EUR/USD – Shaken, Not Stirred

Near-term Setups in EURAUD, GBPUSD, AUDJPY & CADJPY

US DOLLAR Technical Analysis: Has Anyone Seen The Bulls?

AUD/USD Weekly Tweezer Top; Cycle Influence Next Week

Get our top trading opportunities of 2016 HERE

--- Written by David Song, Currency Analyst

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.

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

DISCLOSURES