Never miss a story from David Song

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to David Song

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

- U.S. Consumer Price Index (CPI) to Slow to Annualized 2.1% from 2.2% in November.

- Core Inflation to Hold Steady at 1.7% per Annum, Retail Sales to Increase 0.5% .

Trading the News: U.S. Consumer Price Index (CPI)


Fresh developments coming out of the U.S. economy may fuel the near-term rally in EUR/USD as the Consumer Price Index (CPI) is projected to slow in December, while Retail Sales are expected to increase 0.5% following the 0.8% rise in November.

A set of lackluster data prints is likely drag on the U.S. dollar as it curbs bets for an imminent rate-hike, and the Federal Open Market Committee (FOMC) may largely endorse a wait-and-see approach at the next rate decision on January 31 as inflation continues to run below the 2% target.

Signs of subdued price growth may also spark a growing dissent within the central bank as ‘some participants observed that there was a possibility that inflation might stay below the objective for longer than they currently expected,’ with the FOMC running the risk of completing its hiking-cycle ahead of schedule especially as ‘other persistent factors may be holding down inflation, which would present challenges for the Committee in promoting a return of inflation to 2 percent over the medium term.’

Nevertheless, a set of positive U.S. data prints may tame the recent pickup in EUR/USD, with the pair still at risk of carving a double-top formation amid the failed attempt to clear the September-high (1.2092). New to trading? Review the ‘Traits of a Successful Trader’ series on how to effectively use leverage along with other best practices that any trader can follow.

Impact that the U.S. CPI has had on EUR/USD during the previous release


Data Released



Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)



12/13/2017 13:30:00 GMT





November 2017 U.S. Consumer Price Index (CPI)

EUR/USD 5-Minute Chart


The U.S. Consumer Price Index (CPI) climbed to an annualized 2.2% from 2.0% in October, while the core rate of inflation unexpectedly slipped to 1.7% from 1.8% during the same period to mark the first slowdown since May. A deeper look at the report showed a 3.9% rise in Energy prices, with transportation costs also climbing 1.9%, while prices for Apparel fell 1.3% in November.

The mixed detailed surrounding the inflation report dragged on the U.S. Dollar, with EUR/USD climbing above the 1.1750 region to end the day at 1.1826. For additional resources, download and review the FREE DailyFX Advanced Guide for Trading the News to learn our 8 step strategy.

EUR/USD Daily Chart

EUR/USD Daily Chart

Want more insight? Join DailyFX Currency Analyst David Song LIVEto cover the market reaction to the U.S. CPI & Retail Sales report.

  • EUR/USD appears to be making another attempt to test the September-high (1.2092) as it snaps the series of lower highs & lows from earlier this week, with both price and the Relative Strength Index (RSI) on course to extend the bullish formations carried over from late-2017.
  • Break above the September-high (1.2092) would negate the threat for a double-top, with the next topside hurdle coming in around 1.2130 (50% retracement) followed by the 1.2230 (50% retracement) region.
  • May see EUR/USD stage a more meaningful advance if the RSI pushes into overbought territory as it suggests the bullish momentum is gathering pace.

--- Written by David Song, Currency Analyst

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

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