The United States Bureau of Labor Statistics will publish the US Consumer Price Index (CPI) m/m on January 12 at 15:30 GMT+2. The index measures a change in the price of goods and services purchased by consumers.
US Dollar Index at a 3-month Low
Good Thursday, traders! The day is highlighted by positive Covid-related news from China, softer Powell, and volatility in oil. Let's look at the details.
Events of the day:
17:00 GMT+2, US ISM Manufacturing PMI
Fed Powell pulls the dollar down
The US Chair Jerome Powell confirmed a slower pace of the Fed rate hikes, with a peak of the Fed rate below 5% in May. Previously, the market was pricing at a peak above this level in June. The Fed Chair's remarks made the US Dollar index test the 200-day SMA (3-month low).
EURUSD broke above the 200-day SMA and tested the strong resistance at 1.0450. If this level is broken, we may expect the pair to surge higher toward the resistance at 1.0580. On the downside, the support is placed at 1.0220.
You need to know this:
- The comments from China's top official in charge of the fight against the coronavirus, Vice Premier Sun Chunlan, on the weakening omicron variant and more Chinese getting vaccinated boosted the risk sentiment yesterday. HK50 jumped 3.3% on Wednesday but was moving lower today.
- The oil prices have increased on the softer China's Covid Zero policy. The oil market awaits the OPEC+ meeting on December 4, where the alliance is expected to set the supply levels for 2023.
- The price of Aluminum at the London Stock Exchange exceeded $2500 for the first time since August. This is an excellent opportunity to follow the stock of Alcoa after the market opens.
- Indonesian Central Bank introduced its plan to launch CBDC.
- According to Morgan Stanley, investors lost confidence in Tesla after Elon Musk bought Twitter. Nearly 75% of survey respondents believe the Twitter situation accounted for a significant portion of Tesla's recent share price underperformance.
Take advantage of the market and good luck!
The US dollar index keeps rounding above the 103.60 historical support level. The buyers have already defended this level for three weeks, highlighting their interest in the greenback. Thus, buying USD looks less risky right now.
On the H4 timeframe, the US dollar index has formed a bullish falling wedge. At the beginning of the trading session, the price is testing the upper border of this wedge. Thus, in case of a higher-than-expected Core PCE Price Index m/m, the US dollar will skyrocket against other currencies.
The Reserve Bank of Australia (RBA) will make a statement and release a Cash Rate on February 7, 05:30 GMT+2. It's among the primary tools the RBA uses to communicate with investors about monetary policy.
This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.
S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.