US Inflation Misses, but Good Enough to Keep the Fed, and our AUD/USD Shorts, on Track
Hey guys,
Well here we are back at another Friday. Don’t the days of the week just simply fly by when you’re having fun in the markets! 😉
There’s an Australian radio station called Triple J who on Fridays, do a segment called Like a Version. They get a different band in each week to perform live an original and then a cover.
Today’s band are one of my favourites, a US outfit called Ocean Alley and I have to share their two performances with you before I get into markets.
Enjoy!
Original:
Cover:
So good!
😎.
Market Overview
The big overnight news release was US inflation. I’ve always used Forex Factory for my news releases and the following is a screen from my friends there:
Now inflation is of course important for the overall forex market, because the number is going to effect how hard the Fed continues to raise rates.
The thing with this miss, was that while the inflation rate didn’t accelerate faster than the market expected, it doesn’t matter because it remains on track to meet the Fed’s target.
This to me, means that they’re still on track for multiple hikes this year.
So what’s the US Dollar Index doing? Let’s take a look:
DXY Daily
The Fed are on track to keep raising rates and the DXY is pulling back?? Ah, how good are irrational markets! 😂
But what’s actually happening here is just purely because the market has known that the hikes are coming and have run the buck that little bit too far.
Now comes the pullback as profit is taken off the table and the counter trend traders take control. The data release isn’t the kicker, the market position heading into it, is.
As a daytrader, I’m not really into trading the DXY itself, but the way it shows what half the majors are doing, is really helpful on those other tradable pairs.
Look at the intraday level that we’re at:
DXY Hourly
So the DXY price hasn’t pulled back on profit taking, but coming into this support/resistance zone, it could just as easily rip out of it.
Interesting...
Forex Markets
So turning to forex markets that we can actually look to take trades in.
With the USD pullback that we spoke about in the section above, we can possibly look to add into trades like the AUD/USD short trade that we’re in.
Click that link and look at the levels there, but you can see how it’s unfolding today, below:
AUD/USD Hourly
If you took some profit off at 1:3 or whatever you got, you’re laughing now as price pulls back to our original entry.
But if not, this isn’t a time to panic. Remember the DXY is at support and we still have AUD/USD at resistance.
Relaxxx!
✌🏻.
@forexbrokr | Steemit Blog
Market Analyst and Forex Broker.
Twitter: @forexbrokr
Instagram: @forexbrokr