US CPI data preview – What to expect of EUR/USD?

FX:EURUSD   Euro / U.S. Dollar
Cost of living as measured by consumer price index ( CPI             ) in US is seen rising 0.3% m/m in April. That amounts to 1.1% annualized rise.

The core figure, which strips out the volatile food and energy component, is seen rising 0.2% m/m and 2.1% y/y. March core CPI             in annualized terms stood at 2.2%.

A rebound is not a surprise

Note that rebound inflation as expected by economists is not surprising, given the oil             price rally. Hence, for the USD to rally, it is imperative that the headline figure beats estimates and/or core CPI             figure, especially in annualized terms, rises more than forecast.

A print weaker-than-expected whether headline or core or both, could weaken the greenback.

Moreover, markets do not seem to believe Fed officials who continue to call for a possibility of two more rate hikes this year. Hence, a weak rebound in inflation would be enough to kill whatever little June rate hike bets still existing in the markets.

Impact on EUR/USD

  • The pair is moving in a sort of falling channel on the hourly chart. Bears appear in control, given the pair has failed to sustain above the critical technical zone of 1.1430-1.1534.
  • However, a strong support around 1.13 (daily 50-SMA + rising trend line drawn from March 2015 low-April 2015 low) has restricted losses since Friday’s NY session.
  • On the other hand, stage is set for a rally to 1.1360-1.1380 levels in case CPI             misses estimates by a wide margin.
EN English
EN English (UK)
EN English (IN)
DE Deutsch
FR Français
ES Español
IT Italiano
PL Polski
SV Svenska
TR Türkçe
RU Русский
PT Português
ID Bahasa Indonesia
MS Bahasa Melayu
TH ภาษาไทย
VI Tiếng Việt
JA 日本語
KO 한국어
ZH 简体中文
ZH 繁體中文
AR العربية
Home Stock Screener Forex Signal Finder Cryptocurrency Signal Finder Economic Calendar How It Works Chart Features House Rules Moderators Website & Broker Solutions Widgets Stock Charting Library Feature Request Blog & News FAQ Help & Wiki Twitter
Profile Profile Settings Account and Billing My Support Tickets Contact Support Ideas Published Followers Following Private Messages Chat Sign Out