Trading Insights: Trading the “inflation trade”
Source: TradingView July 10th 2023 6:36 UTC
Trader focus will be on the US inflation data for June that is due to be released on Wednesday.
Could the recent USD weakness be a sign that USD FX traders are confident that US inflation will continue to trend lower?
The above chart illustrates the US dollar weakness seen during the last 5 days of trading.
While this week's key economic data calendar will focus on US inflation, trader focus could look towards last week's commodities price moves.
US Inflation data due at 12:30 UTC on Wednesday:
*Core US consumer price index (CPI) year on year is forecasted to have fallen 0.3%, from 5.3% to 5% during the month of June 2023.
Source: Tradingview July 10 2023 8:50 UTC
5 day percentage moves - source Tradingview
Speculation that commodities moved higher last week on the back of a weaker USD?
Recent USD weakness may have triggered an increase in speculation that USD-sensitive commodities could see an increase in demand as non-USD based physical commodities traders stock up on commodities priced in USD.
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Today’s economic calendar
Source: TradingView / J. Knobel July 10 2023 6:30 UTC
Trading insights & strategy
Germany 40 (DAX Index) trading above key support
Current price €15,587 Provided price remains above its 40 week (200 day) moving average, as well as above key support near 15,420, the prospects for a further extension of the prevailing multi-month uptrend can not be ruled out. Upside extension over the medium term (25-49 days) could be towards the 17,170s, while downside risk below the 15,420s could place the lower support near 13,940s in view.
Not investment advice. Past performance does not guarantee or predict future performance.
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