What to expect from the forex market after lower than expected CPI release? 

What to expect from the forex market after lower than expected CPI release? 

2023-11-15 • Updated

The U.S. dollar experienced significant losses as October's inflation data hinted at the Federal Reserve concluding interest rate hikes. The dollar index dropped 1.50% to its lowest since September. October's consumer price index (CPI) showed a flat monthly change and a 3.2% increase over the previous year, with core CPI slightly below forecasts at 0.2% and 4%. U.S. Treasury yields fell, with the 10-year yield dropping over 18 basis points to 4.4%. Analysts suggest the Fed might halt rate hikes due to soft inflation and tight financial conditions, with markets anticipating rate cuts in May 2024.

GBPUSD - D1 Timeframe

GBPUSDDaily-1511.png

GBPUSD on the Daily timeframe chart, as seen above, is currently trading within a supply zone. The 100-day moving average provides additional confluence for a possible bearish momentum. Another considerable confluence is the fact that the 50-day moving average is currently below the 100 and 200 period moving averages.

Analyst’s Expectations: 

Direction: Bearish

Target: 1.22481

Invalidation: 1.25577

EURUSD - D1 Timeframe

EURUSDDaily-1511.png

When a trendline supports gets broken, it flips over and becomes a resistance - this is basic break-and-retest knowledge. Considering that price is retesting the trendline resistance whilst inside a supply zone - as seen in the chart -  adds further confirmation to the possibility of a drop in prices.

Analyst’s Expectations: 

Direction: Bearish

Target: 1.07090

Invalidation: 1.09564

USDCHF - D1 Timeframe

USDCHFDaily-1511.png

The Daily timeframe of the USDCHF chart is currently approaching a demand zone. A few other confluences to consider in favour of the bullish movement include; the trendline support, the 100-day moving average support, and the 88% of the Fibonacci retracement level.

Analyst’s Expectations: 

Direction: Bearish

Target: 0.90069

Invalidation: 0.88306

CONCLUSION

The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.

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