US inflation (CPI) technical preview

Aaron Hill FP Markets

1:30 pm GMT will see the latest US inflation data, the highlight macroeconomic point for the week. Current market consensus, on a month-over-month basis, calls for a 0.6% increase in the consumer prices index (CPI) and a 0.5% increase in the monthly core reading. The year-over-year CPI print for October is poised to increase by 8.0%, following September’s 8.2% (estimated range is between 8.2% and 7.6%), with the core estimate set to increase by 6.5% from September’s 6.6% release.

Technical view – US Dollar Index

From the daily timeframe, the US Dollar Index recently recoiled from an accelerating trendline support, taken from the low 95.17, housed within a decision point at 109.31-110.24. The 50-day simple moving average calls for attention to the upside at 111.30, poised to perhaps deliver dynamic resistance. We can also see that the relative strength index (RSI) is rebounding from long-term support between 40.00 and 50.00, a common zone visible in uptrends.

Based on the H1 timeframe, shorter-term levels to be aware of heading into the release are resistance between 111.70 and 111.40 (merging closely with the 50-day SMA on the daily scale). This comprises an AB=CD bearish formation (100% projection at 111.44) and a trendline support-turned resistance, extended from the low 109.54. To the downside, immediate support resides at 110.74 and 110.56.

Author

Aaron Hill

FP Markets

After completing his Bachelor’s degree in English and Creative Writing in the UK, and subsequently spending a handful of years teaching English as a foreign language teacher around Asia, Aaron was introduced to financial trading,

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