USD/NOK continues losing ground after US PPI, CPI data looms
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- Jerome Powell stated on Tuesday that his confidence in inflation coming down is lower.
- The US reported that April’s PPI aligned with expectations.
- April’s CPI and Retail Sales will define the outlook of the USD.
The USD/NOK pair is trading lower on Tuesday. Overall, the USD strength persists despite a mild bearish pressure and Jerome Powell confirmed its wait-and-watch approach by the bank.
The US economy continues to showcase considerable strength, with persistent indications of a resilient labor market and sustained consumer spending, as noted by Federal Reserve Chairman Jerome Powell on Tuesday. His sentiment, however, carried a note of caution regarding the dilemma of inflation and the subsequent need for consistency in implementing restrictive policies.
On the data front, the US Producer Price Index (PPI) figures resonated with these insights, reporting a year-on-year increase of 2.2% in April, in conformity with market forecasts. On Wednesday, the US will report April's Consumer Price Index (CPI) which is expected to have shown a deceleration and will shape the expectations for the next Fed decision. As for now, the kick-off of the easing is seen starting in September.
USD/NOK technical analysis
On the daily chart, the Relative Strength Index (RSI) is oscillating within negative territory, signaling that sellers may continue to control the market. Despite a brief shift in momentum on Monday, with the RSI hitting 50.99, the most recent session sees the RSI at 46.20, suggesting a continuation of the bearish sentiment. The Moving Average Convergence Divergence (MACD) histogram further bolsters this sentiment, with its red bars increasing, indicative of a growing bearish momentum.
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