Key points of US inflation:
- US Stocks Earn Week Earlier, Nasdaq 100 Leads Wall Street Gains
- Meanwhile, US dollar and gold prices are slightly weaker ahead of Tuesday’s key US economic report.
- US inflation data for January due out tomorrow morning sets the tone for trading in a range of assets
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Most Read: Understanding Inflation and Its Global Impact
Risky assets were bid Monday ahead of key US economic data. In afternoon trading, the general US dollar weakened slightly, EUR and the british poundGold prices, meanwhile, were subdued and the Nasdaq 100 posted a strong gain, aided by a surge in tech stocks.
However, recent market dynamics could reverse, or possibly strengthen, after the U.S. Bureau of Labor Statistics released its latest inflation report on Tuesday morning, so traders should pay close attention to results. there is.
Headline CPI for January is projected to rise 0.5% in seasonally adjusted terms, raising the annualized rate from 6.5% to 6.2%. As part of that, the core gauge, which excludes energy and food ingredients, is up 0.4% on a monthly basis and 5.5% over the last 12 months.
Tomorrow’s announcement will come under intense scrutiny on Wall Street for clues on the outlook for consumer prices. Existence of disinflation Many times at the last FOMC meeting.
For stocks to stay strong, future data must point to a significant decline in the inflation driver. Otherwise, the trader could raise his Fed’s terminal rate, pushing US Treasury yields higher and putting pressure on gold prices. This latter hypothesis favors the US dollar in the currency arena and poses some challenges for the euro.
Consumer prices have cooled sharply recently, but rising energy costs early in the year, a very tight labor market, and seasonal adjustments by the Bureau of Labor Statistics will slow the convergence of inflation towards the Fed’s 2% target. There is a possibility. With traders walking on eggshells, a better-than-expected rise in the CPI could shatter confidence and stimulate volatility across asset classes.
Technical setting before US CPI data
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EUR/USD Technical Analysis
EUR/USD has been consolidating between the 1.0785 resistance and 1.0661 support over the past few trading sessions. If the price resolves to the downside, we might see a retest of 1.0467 in the near future. In contrast, if the consolidation resolves upwards, the pair could rise towards 1.0942. With more strength, the focus shifts to 2023 highs.
EUR/USD chart
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NASDAQ 100 Technical Analysis
The Nasdaq 100 resumed its rally on Monday, bouncing off near-12,200 short-term trendline support after last week’s selloff. If the bulls continue to dominate the market going forward, the first resistance is near his January highs, which also corresponds to his 38.2% Fib retracement of the 2021-2022 slump. On the other hand, if the seller resurfaces and triggers a bearish reversal, the support is at 12,200, after which he is near the 200-day simple moving average at 11,900.
Nasdaq 100 chart
Source: Trading View
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Gold price technical analysis
At the time of writing, gold prices are trading below the 50-day simple moving average. If this breakdown persists, the bears could soon start attacking his 38.2% Fibonacci retracement of $1,828, the September 2022/February 2023 rally. On further bearishness, attention turns him to $1,805. Conversely, if the price reverses, the first resistance to consider is He at $1,890, followed by He at $1,920.
gold price chart
Source: Trading View