Who’s down to trade the U.S. core PCE price index report?
If you’re counting on more dollar strength, here’s a Cable downtrend setup you should see!
Before moving on, ICYMI, yesterday’s watchlist explored an intraweek trend on USD/JPY ahead of the advance U.S. GDP release. Be sure to check out if it’s still a valid trade!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Tokyo core CPI slipped from 0.5% to 0.2% vs. 0.3% forecastAustralian producer prices rose 1.3% vs. projected 0.9% gain
Asian markets mostly sideways ahead of U.S. inflation data
Swiss KOF economic barometer up from 107.2 to 107.8 vs. 106.0 forecast
French consumer spending up by 0.2% vs. projected 0.1% uptick
French flash GDP at 0.7% vs. 0.5% in Q4 2021
Spanish economy grew 2.0% vs. 1.4% forecast in Q4 2021
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.S. core PCE price index at 1:30 pm GMT
U.S. personal income and spending data at 1:30 pm GMT
U.S. UoM revised consumer sentiment index at 3:00 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: GBP/USD
Fed rate hikes have been the talk of the town for the most part of the week, and stronger-than-expected U.S. GDP further boosted tightening hopes.
Will the upcoming U.S. core PCE price index support the case for a March hike?Analysts are predicting another 0.5% uptick in price pressures, so any reading higher than that might seal the deal for higher U.S. borrowing costs soon.
This might mean more upside for the scrilla before the week comes to a close, even against the pound whose central bank is also pressured to tighten.
Keep in mind, though, that the pickup in U.S. price pressures is backed by strong growth while the U.K. is plagued by stagflation concerns.
I’m expecting some volatility during the release, and this might still take GBP/USD up to correction levels marked by the Fib tool. In particular, I’m eyeing the 61.8% level near the channel top and the 38.2% Fib that coincides with the mid-channel area of interest.
Technical indicators seem to be hinting at a continuation of the downtrend, as the 100 SMA is below the 200 SMA while Stochastic is closing in on the overbought zone.
In that case, GBP/USD might slide back to the swing low near the 1.3350 minor psychological mark or lower!