US March CPI highest since December 1981
The US released March inflation data earlier today. The headline CPI print was 8.6% YoY vs 8.5% YoY expected and 7.9% in February. This was the highest inflation reading since December 1981! The large increase over last month’s reading was primarily due to an increase in food and energy prices. The core CPI for March, which excludes these volatile components, was “only” 6.5% YoY vs an expectation on 6.6% YoY and 6.4% YoY in February. This was the highest level since August 1982. These result help to further Fed Governor Evans claim from yesterday that a 50bps hike is highly likely at the May FOMC meeting.
Yesterday, the White House warned the markets that these numbers would be strong, which led many to believe they would be stronger than estimates. However, after the release of the data, the markets felt a sense of relief (fearing the prints could be worse) and the US Dollar moved lower. Price traded from 100.20 down to 99.74 before bouncing.
Source: Tradingview, Stone X
Trade DXY now: Login or Open a new account!
• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
On a 240-minute timeframe, DXY has been moving higher in an orderly channel since March 31st. However, yesterday the US Dollar Index began moving sideways and traded out of the channel. Although it reached a near-term new high today at 100.23, the RSI is diverging, which was a signal price may have been ready for a pullback. Support is at the March 28th highs near 99.37. Below there, price can fall to the lows from March 30th at 97.74. First resistance is at the bottom trendline of the upward sloping channel and the 161.8% Fibonacci extension level from the highs of March 28th to the low of March 30th near 100.41. Above there price can trade to the highs from April 2020 at 100.93.
Source: Tradingview, Stone X
Trade EUR/USD now: Login or Open a new account!
• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
EUR/USD has been moving in a similar, but opposite direction of DXY. Price had been moving lower in an orderly channel since March 31st and traded sideways, out of the channel. However, unlike the DXY, EUR/USD did not make a new near-term low today. First support is at the lows from April 8th near 1.0836, then the lows from March 7th at 1.0806. Just below there, support is at the 161.8% Fibonacci extension from the lows of March 28th to the highs of March 31st, near 1.0792. Resistance is at the March 28th lows near 1.0945, then horizontal resistance at 1.1028. If price breaks above there, it can run to the highs of March 31st at 1.1190.
Source: Tradingview, Stone X
US CPI came in hot today! However, markets may have expected it, thanks to a warning from the White House yesterday. Therefore, traders may have sensed a little relief that the number wasn’t worse and markets did the opposite of what one may expect. Watch to see if the markets correct themselves over the next few days, especially if more talks of a 50bps hike at the May FOMC meeting begin to make the rounds!
Learn more about forex trading opportunities.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.
ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.
City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.
The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.
The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.
The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
© City Index 2024