US CPI On Watch
The main data focus today is of course the US October CPI reading. The inflationary spiral in the US has been a major market theme over recent months. On the back of the Fed announcing tapering last week, the market will now be keen to receive the latest inflation reading with a view to gauging whether the Fed is likely to accelerate the pace of monetary tightening in the near term.
In terms of the numbers, the market is looking for headline inflation to rise to 0.6% from 0.4% prior, with core inflation forecast to rise to 0.4% from 0.2% prior. With an increase in this region seen taking annual inflation up to 5.8%, its highest level since the 80s, USD will likely be a little firmer in response. However, it would take an upside beat to materially boost USD while any downside miss would likely see the current USD drop continue.
Where To Trade US CPI?
Gold
The recent rally in gold has seen price breaking out above the bear channel. The market is now testing the 1826.71 level with both MACD and RSI giving bullish signals. Any USD downside from today’s data will likely see gold moving higher towards the 1871.04 level next. To the downside, any correction lower will put the focus on support at the 1763.88 level next.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.