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.
Will the economic data drive the USD up?
What will happen?
The United States will release retail sales and producer inflation (PPI index) numbers at 15:30 MT time on June 15. American economic recovery has been the prevailing topic for traders in the past few months. It seems like everything depends on it: the better the US figures, the higher the probability that American central bank, the Federal Reserve, will start increasing interest rates. Higher rates, in turn, will make traders buy the greenback and sell gold.
Notice that in April US retail sales unexpectedly stalled as the boost from stimulus checks faded, while PPI spiked 6.2% for the 12 months ended in April.
How to trade on the US data?
Ahead of the release, determine support and resistance levels for the pairs that have the USD in them. If the difference between the forecast and the actual number is big, the price will likely break those levels.
- If the actual figures exceed forecast levels, the USD will rise.
- If the releases disappoint, the USD will fall.
Instruments to trade: EUR/USD, USD/JPY, USD/CAD, XAU/USD
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.
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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.
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.