This post was originally published on this site.
The U.S. CPI report came in right in line with expectations for both the headline and core readings, giving the market some confidence that the broader inflation trend continues to move in the right direction. Shelter costs accounted for roughly two-thirds of the monthly increase, suggesting inflation would look considerably better if housing-related pressures begin to ease.
The market reaction has been modestly dovish. Expectations for a September Fed rate hike have slipped from around 46% to 42.1%, while Treasury yields have moved lower. The 2-year yield is down 4.2 basis points to 4.176%, while the 10-year yield is lower by 2.8 basis points at 4.655%. US stocks are higher with the Dow industrial average is up 150 points. The S&P is up 29 points and the NASDAQ 100 is up 100 points in futures trading.
In the video above, I take a technical look at EURUSD, USDJPY, GBPUSD, USDCHF and USDCAD, focusing on what the post-CPI price action has done to the bias, risk and targets for each pair. Where do buyers have control? Where do sellers have control? What levels would shift the bias, and where are the next targets?
The video walks through those key technical levels in real time and, more importantly, explains why they matter.
Summary includes:
- EURUSD: The EURUSD is trading higher, but the day’s high at 1.1562 remains just below the 100-day moving average at 1.15665. A move above and staying above that moving average would strengthen the bullish bias and have traders targeting the 50% midpoint of the decline from the 2026 high at 1.1586.
- USDJPY: The USDJPY moved lower and tested its rising 100-hour moving average at 158.697, with the session low reaching 158.69 before rebounding modestly to around 158.80. A move below and staying below the 100-hour MA would shift the focus toward the nearly converged 200-hour MA at 158.20 and 200-day MA at 158.126.
- GBPUSD: The GBPUSD extended to a new session high at 1.3541, putting the July high at 1.35573 in focus. A break above that level would take the pair to its highest level since May 12 and open the door for a move toward the April high at 1.3657.
- USDCHF: The USDCHF has moved back down to test its 100-hour MA at 0.8103 and 200-hour MA at 0.80949. A break below those levels would tilt the bias back to the downside after the more bullish price action over the last two days. Since mid-June, the pair has traded mostly between 0.8029 and 0.81513, with some extensions on either side. The 100- and 200-hour MAs sit near the middle of that range and remain key shorter-term barometers for buyers and sellers.
- USDCAD: The USDCAD is dipping below its 100-day moving average at 1.39176, marking the first move below that MA since May 15. Staying below the 100-day MA and then breaking the 50% retracement at 1.3899 would increase the bearish bias and have traders looking toward the 200-day moving average at 1.3853.
This article was written by Greg Michalowski at investinglive.com.
