Tomorrow brings a critical US CPI report and the expectation is for Core CPI to push back up to 3% with headline CPI moving up to 2.8%. This makes for a more difficult backdrop for the Fed to cut rates and as Powell had said at the last FOMC meeting, with the unemployment rate remaining near full employment and inflation remaining relatively high it doesn’t look as though policy is too restrictive.
And there’s also the question that if the Fed did cut rates, whether it would actually help matters as last year’s rate cuts boosted inflation expectations and, in-turn, long-term rates such as the 10 and 30-year, which are more aligned with things like mortgage rates. The USD also rallied on the back of that even as the Fed was cutting rates and so far this year, the Fed has seemed trepidatious to fall into the same trap, instead saying that inflation potential from tariffs was enough to keep them from moderating rates.
Today’s video is an update of the Friday video where I looked at price action setups across major FX pairs.
EUR/USD has pushed down to near-term support and remains of interest for USD-strength.
USD/CAD has so far held Fibonacci support and pushed a shorter-term higher-high.
GBP/USD remains of interest for USD-weakness. And USD/JPY has shown large macro impact to CPI prints over the past couple of years and that remains a hot button into tomorrow’s data release.
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man… been stuck trying to scalp GBP/USD all week and it’s like every candle’s got a stop hunt written on it. thought pre-CPI would give me clean moves but nah… just chop city. might need to pay someone for real 1-on-1, this DIY stuff draining me