Trading volatility: USD around US consumer prices
Having seen a week of US jobs data, all reinforcing the fact that the US has weathered high rates, the next opportunity to trade USD is Tuesday’s CPI.
IGTV’s Jeremy Naylor now looks at a the potential downside for the US dollar, pushing up EUR/USD, with a price target well ahead of current levels.
(AI Video Summary)
Interest rates and USD analysis
This video is all about trading and how the upcoming release of consumer price inflation data can affect it. Jeremy Naylor suggests that interest rates might be going down, which could impact trading. The call rate is expected to fall, but the headline rate will stay the same. There's concern that this may be the end of the interest rate cycle, but rising oil prices could cause inflation to go up.
Naylor also talks about the performance of the US dollar and provides a chart analysis. The long-term interest rate is at a certain number, but there's a red dotted line indicating a potential decline. To trade this, he suggests using the EUR/USD pair, as the euro is doing well right now because the dollar is weak. The European Central Bank's recent actions also support buying the euro.
Technical analysis
Naylor goes into technical analysis and shows a chart pattern and a Fibonacci retracement, which gives some predictions for future gains. The initial price target is at a certain level, with a stop loss just below another level. If the market surpasses a certain mark, the next target would be a higher level.
Importance of upcoming CPI
Finally, he stresses the importance of the upcoming release of consumer price inflation data and suggests keeping an eye on it. If the data supports more weakness in the dollar, the video advises trading the euro higher against the dollar and setting a stop loss based on recent price action.
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