The US Dollar’s Decline After Inflation Data Release

US economic indicators suggest slowing inflation and unchanged retail sales, hinting at potential interest rate cuts. The S&P 500 hits an all-time high, while gold surges. USD/JPY shows bearish trends, with key support levels being closely monitored.

fXOPEN750

Key economic indicators for the US were released recently, impacting the financial landscape:

  • Core Price Index (CPI) monthly: actual = 0.3%, expected = 0.4%, previous = 0.4%
  • Core Price Index (CPI) annual: actual = 3.4%, expected = 3.4%, previous = 3.5%
  • Retail Sales monthly: actual = 0.0%, expected = 0.4%, previous = 0.6%

Despite concerns over rising inflation, retail sales remaining unchanged hint at potential interest rate cuts, as per Reuters.

This news led to significant reactions in financial markets, notably a weakening of the US dollar:

  • Market participants reacted to signs of slowing inflation, raising expectations for rate cuts and pushing the S&P 500 stock index (US SPX 500 mini on FXOpen) to an all-time high.
  • Gold prices also surged to levels not seen since April 21.
  • Other currencies gained strength against the US dollar.

An intriguing trend is unfolding on the USD/JPY chart, with Fibonacci ratios revealing three instances where price recovery stalled around the 0.382 level:

  • Recovery from B to C after an impulsive decline from A to B.
  • Recovery from D to E following a decline from C to D.
  • Recovery from F to G after a 3-wave decline from A to F.

FXOpen graph

Technical analysis of USD/JPY suggests fading demand with each attempt to resume the upward trend within the blue channel. The local peak at G indicates resistance along the median line, potentially signaling continued bearish dominance and downward price movement. If this trend persists, support levels at 151.85, 150.88, and the psychological level of 150.00, along with the lower channel boundary, will be crucial tests for bearish intentions.

FXOpen offers spreads from 0.0 pips and commissions from $1.50 per lot. Enjoy trading on MT4, MT5, TickTrader or TradingView trading platforms!

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

The subject matter and the content of this article are solely the views of the author. FinanceFeeds does not bear any legal responsibility for the content of this article and they do not reflect the viewpoint of FinanceFeeds or its editorial staff.

Read this next

Interviews

Exclusive: Autochartist CEO Ilan Azbel Delivers Insight on AI at iFX EXPO LATAM 2024

In an insightful interview with FinanceFeeds at iFX EXPO LATAM 2024, Ilan Azbel, CEO of Autochartist, discussed the evolution of trading technology, effective trader engagement strategies, the integration of AI in trading analytics, and the cautious approach of regulated brokers towards its adoption.

Market News

Weekly data: Oil and Gold: Price review for the week ahead.

This preview of weekly data looks at USOIL and XAUUSD where economic data coming up later this week are the main market drivers for the near short-term outlook.

Crypto Insider

Octa’s insights: the approval of spot Ethereum ETFs is not going as planned.

The approval of spot Bitcoin exchange-traded funds (ETF) by the U.S. Securities and Exchange Commission (SEC) in January 2024 triggered a substantial rise in the bitcoin price. Also, interest in the proposed spot Ethereum ETF has increased

Industry News

Bursa Malaysia introduces Trading Reminders

The Trading Reminder flag aims to alert investors to exercise caution when encountering a stock displaying persistent unusual price and/or volume movements after the listed company’s UMA response.

Industry News

21 Republican representatives want to “End the Fed”

“Americans are suffering under crippling inflation, and the Federal Reserve is to blame.”

Retail FX

Scope Markets launches unleveraged trading

“Whilst our traditional contract for difference (CFD) products continue to prove incredibly popular, the Invest account is unleveraged and only allows ‘long’ positions to be taken, a combination that significantly reduces the risk of capital losses.”

blockdag

Unlocking Profit Potential: Earn Returns with DecodeEX Experience Bonus!

DecodeEX, the innovative brokerage subsidiary of Decode Global, announced its experience bonus campaign, offering every user the opportunity to maximize their strategic trading potential with up to $10,000 in experience bonus. 

Market News

Pretiorates’ Thoughts 28 – Precious metals and base metals out of control

Ten days ago we mentioned in Pretiorates’ Thoughts 26: Chapter 2 should start with Precious Metals.

Retail FX

Webull launches discount brokerage in Malaysia

“Making investing more inclusive and accessible to all, Webull Malaysia brings best-in-class tools and information to empower investors of all levels with knowledge and skills to help them make better investment decisions and achieve their investment goals.”

<