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Daily Analysis: Dollar Dumps and Pumps on Inflation Miss

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Daily Analysis: Dollar Dumps and Pumps on Inflation Miss

Introduction

This article was posted on Friday, 15:50, UTC.

Friday Market Recap

Asset Current Value Daily Change
S&P 500 2444 0.29%
DAX 12034 0.12%
WTI Crude Oil 48.34 -0.51%
GOLD 1291.00 0.08%
Bitcoin 3534 3.83%
EUR/USD 1.1795 0.20%

The most awaited economic release of the week came out today, and the Consumer Price Index (CPI) missed the consensus once again, adding to a string of weak data from the previous months. The Dollar got back to the forefront of trading after the release as it quickly lost most of its recent gains against the Euro before a strong rebound. The North Korean situation remains the primary topic, as China entered the picture in earnest when they will “prevent a regime change” in the communist country, although they would also be neutral should North Korea attack first. Safe haven buying favored the Greenback before the CPI release and forex markets are expected to remains choppy amid the conflicting signals.

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EUR/USD, 4-Hour Chart Analysis

Stocks staged a rebound off their overnight lows but the major indices are not out of the woods, and odds favor more downside, as volatility remains high, and geopolitical uncertainty remains high. The previously present internal weakness doesn’t help either as the markets were ripe for a deeper correction without the North Korean “trigger”. Gold spiked to a new high after the inflation number, with the spot price getting very close to the $1300 level. Oil continues to suffer below the $50 per barrel price, and the crucial commodity might be ready to roll over towards the bottom of its long-standing trading range once again.

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Crude Oil, 4-Hour Chart Analysis

Cryptocurrencies

Bitcoin cleared the $3500 level today after a short consolidation period following the key break-out above $3000 last weekend. The other majors are lagging the most valuable coin as the risk-off sentiment favors BTC which is widely considered as a safe haven asset. That said, Ethereum, Monero, Dash, and Litecoin are also in clear uptrends, and the bullish environment didn’t change in during the global sell-off. Ripple, and Ethereum Classic are the clear laggards among the majors, while IOTA and NEO are moving up the quickly after a very strong week.

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BTC/USD, 4-Hour Chart Analysis

Technical Picture

The short-term uptrend in the NASDAQ broke down earlier on this week, and the index breached the 5800 yesterday, before bouncing back today in early trading. The internal weakness in equities suggests more downside, and that could mean a re-test of the rising long-term trednline and the 5725 support in the coming days. The current bounce could run into resistance near 5850, and that could present an ideal shorting opportunity.

NASDAQ 100 Futures, 4-Hour Chart Analysis

Key Economic Releases on Friday

Time, CET Country Release Actual Expected Previous
8:00 GERMANY Final CPI 0.4% 0.4% 0.4%
14:30 US CPI Index 0.1% 0.2% 0.0%
14:30 US Core CPI Index 0.1% 0.2% 0.1%

Key Economic Releases on Monday

Time, CET Country Release Expected Previous
1:50 JAPAN Prelim GDP 0.3%
4:00 CHINA Industrial Production 7.6%
4:00 CHINA Retail Sales 11.0%
11:00 EUEOZONE Industrial Production 1.3%

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Mate Cser

Mate Cser

Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.

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