For a long time, traders considered American Non-farm Payrolls (NFP) the most important release in the market. However, the situation has changed. Now US CPI moves financial markets.
Trading plan for Aug 16
- The USD index rose to the highest level since June 2017 on Wednesday. US retail sales data showed that American economy continues to outperform.
- The index peaked ahead of 97.00 and pulled back on Thursday. Risk aversion eased down on news that a Chinese delegation will travel to the United States late in August to hold trade talks. AUD/USD recovered on this news. Domestic data from Australia were mixed.
- Turkish crisis continues. Turkey doubled tariffs on some US imports, but the actions of finance authorities helped the lira recover.
- EUR/USD slid to 1.13. The euro is hit by concerns that Turkish financial turmoil will affect the euro area. The level provided support for the euro but it will meet resistance around 1.1450.
- The GBP kept declining on Wednesday on fears of no-Brexit deal and strong USD. Still, GBP/USD found some support at 1.2660 ahead of 1.2580.
Events on Thursday:
11:30 MT time – British Retail Sales
15:30 MT time – US Building Permits, Housing Starts & Philly Fed Manufacturing Index
The higher prices seen today are generally related to the pandemic, that’s no doubt. US consumer prices jumped in October at the fastest pace in three decades putting the Biden administration on the defensive and increasing prospects that the Federal Reserve will raise interest rates next year. Jerome Powell says Fed will discuss speeding up bond-buying taper at the December meeting. What does it mean for markets?
It seems like most of the assets have joined Black Friday's sell-off with global indices, risky currencies, and commodities going down.
Gold is about to break the most significant support. The US dollar index keeps gaining momentum. However, the situation might change this week, and we might see a tiny correction. Investors might return to risk-on and push the US stock market indices and cryptocurrencies to the upside. These and more trade ideas are in our new weekly video! Do not miss it!
This week is likely to be pivotal for many assets, including gold, USD, and several stocks. However, we need to be focused and react fast to the ever-changing environment to get the most from it.
This week, the majors will be affected by the interest rate decision by the Federal Reserve, NFP, the BOE Meeting, and more events.