The USDOLLAR is trading in its bear channel, between the lower blue and red bands, ahead of tomorrow's CPI release. Its RSI is also on the bearish side of 50.
Headline inflation is expected to come in at 6.5% compared with last months 7.1%. Last week's Services PMI showed contraction at 49.6 when 55 was expected (below 50 suggests contraction) and yesterday the NFIB small business index was lower than expected at 89.8 (91.6 - forecast).
In this environment, and barring upside surprises, a Fed pivot remains a probability. As such,in our view, the FXCM USDOLLAR basket has a soft bias until proven otherwise.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.