It remains to be seen whether the U.S. CPI will drop from 8.5% to 8.1%

It remains to be seen whether the U.S. CPI will drop from 8.5% to 8.1%

13.09.2022

In yesterday’s U.S. currency trading, the dollar faced resistance as expectations grew that today’s U.S. CPI release would mark a peak, fueling speculation that the pace of monetary tightening would ease. The GBP/USD pair rose by approximately 110 pips yesterday and continues to rebound along the 20-period moving average on the hourly chart. With today’s U.S. CPI forecast at 8.1% year-over-year, we will be watching closely to see if the figure comes in below market expectations.

European currencies saw the euro rise across the board following the withdrawal of Russian troops from Ukraine. The euro/yen pair rose by more than 2 yen yesterday and is currently trading around 144.345. From a technical perspective, the euro/yen is trading just below the 10-period moving average on the 4-hour chart, and with RSI divergence evident, traders should be on guard for a potential decline during U.S. trading hours.

Today, during Asian trading hours, the UK Employment Report and German Consumer Price Index will be released at 15:00, followed by Swiss Producer Import Prices at 15:30. During European trading hours, Turkish Industrial Production will be released at 16:00, and the GermanZEW Economic Sentiment Index, and the Eurozone ZEW Economic Sentiment Index at 18:00; the U.S. NFIB Small Business Optimism Index at 19:00; the U.S. Consumer Price Index (CPI) at 21:30 U.S. time; the U.S. 30-year Treasury auction at 26:00; the U.S. budget balance at 27:00; and New Zealand’s Q2 current account balance at 7:45 the following day.We will be closely watching to see if the U.S. CPI drops from 8.5% to 8.1%.