US CPI rates imply easing inflationary pressures

The US CPI rates for April came in as expected, implying easing inflationary pressures in the US economy. In particular,  the headline CPI rate on a yoy level came in at 3.4% which would be lower than the previous reading of 3.5%, in addition to the Core CPI on a yoy level as well, also came in lower than the prior reading at 3.6%. Following the release, the greenback appears to have weakened against its counterparts, as pressure on the Fed to ease on their hawkish monetary policy stance may be increasing. Australia’s employment data which was released earlier on today, showcased a loosening, as despite the Employment change figure beating expectations by coming at 38.5k, the unemployment rate increased from 3.9% to 4.1%, thus overshadowing the prior release. However, Aussie traders may find some relief in tomorrow’s Asian session, where China’s industrial production for April is expected to improve to 5.4% from 4.5%, thus an increase in Chinese production, could imply an increase in demand for raw materials from Australia, hence potentially providing some support for the Aussie.On a political level, we highlight that the stage is set, for the debate between US President Donald Trump (R) and Incumbent President Biden (D) on the 27th of June. The US weekly EIA crude oil inventories figure showcased a greater drawdown in inventories, which may support Oil prices.

EUR/USD appears to be moving in an upwards fashion. We maintain a bullish outlook for the pair and supporting our case is the upwards moving trendline which was incepted on the 1  of May, in addition to the RSI Indicator below our chart which currently registers a figure near 70, implying a strong bullish market sentiment. For our bullish outlook to continue, we would require a break above the 1.0892 (R1) resistance line with the next possible target for the bulls being the 1.0955 (R2) resistance line. On the flip side, for a bearish outlook we would require a clear break below the 1.0810 (S1) support level, with the next possible target for the bears being the 1.0725 (S2) support line. Lastly, for a sideways bias we would require the pair to remain confined between the 1.0810 (S1) support level and the 1.0892 (R1) resistance line.

USD/JPY appears have reversed course since yesterday and appears to be moving in a downwards fashion. We switch our bullish outlook in favour of a bearish outlook for the pair and supporting our case is the RSI indicator below our chart which currently registers a figure near 30, implying strong bearish market tendencies. In addition, the pair has broken below our support turned to resistance at the 154.50 (R1) level. For our bearish outlook to continue, we would require a break below the 152.80 (S1) support line, with the next possible target for the bears being the 150.90 (S2) support line. On the flip side for a bullish outlook, we would require a clear break above the 154.50 (R1) resistance line with the next possible target for the bulls being the 156.60 (R2) resistance level. Lastly, for a sideways bias we would require the pair to remain within the sideways channel defined by the 154.50 (R1) resistance line and and the 152.80 (S1) support level.

Autres faits marquants de la journée :

In today’s European session we get Norway’s GDP growth rate for Q1. During the American session we note the US housing starts figure for April, the US weekly initial jobless claims figure, the US Philly Fed business index figure for May and the US Industrial production rate for April. In tomorrow’s Asian session, we note China’s Urban investment rate, Industrial output rate and Retail sales rate all for the month of April. On the monetary front, we note the speeches by Riksbank Deputy Governor Floden, ECB member Centeno, BoE Green, Fed Vice Chair Barr’s testimony before the senate, Philadelphia Fed President Harkers, Cleveland Fed President Mester and Atlanta Fed President Bostic’s speeches and lastly ECB policymaker de Cos and Vice President De Guindos are set to speak together.

Graphique de l’EUR/USD H4

Support: 1.0810 (S1), 1.0725 (S2), 1.0655 (S3)

Resistance: 1.0892 (R1), 1.0955 (R2), 1.1015 (R3)

Graphique de l’USD/JPY H4

Support: 152.80 (S1), 150.90 (S2), 149.05 (S3)

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