Trading Insight: USD eyes key CPI print prior to ECB

Trading Insight Talking Points:

• Bitcoin jumps above $26,000,
• Has inflation eased enough for the Fed?
• Oil prices move above 20 - month MA
• Core inflation on deck, gold dips below $1,910.

USD stalks latest inflation print

US core inflation data is scheduled to be released at 14:30 CET, pathing the way for the next FOMC. With core inflation (year-on-year) expected to decline from 4.7% to 4.3%, the August annual inflation rate is expected to rise from 3.2% to 3.6% this month.

As equity indices remain subdued, this month’s inflation print is expected to be an important catalyst for price action.

While the ECB prepares for the next, big ECB rate decision, the US is preparing to provide the trajectory for inflation expectations for the next fiscal year.

With oil prices ticking higher on fears over potential supply constraints, WTI crude has continued higher, with prices threatening a retest of $90.00.

WTI crude daily chart

Chart prepared using TradingView

Although oil prices remain a key concern for inflation expectations, risk assets, such as global stock indices and cryptocurrency have remained cautious ahead of the key economic data.

While the largest cryptocurrency (Bitcoin) in terms of market capitalization eyes $26,267 resistance at the 78.6% Fibonacci of the June - July 2023 move, expectations of lower rates could provide the catalyst necessary to drive BTC/USD above $27,000, opening the door for bullish continuation to the 100 - week MA of $27,680.

Bitcoin daily chart

Chart prepared on TradingView

As EUR/USD hovers above 1.073, the next US CPI print and the ECB rate decision are expected to remain prominent drivers of volatility and price action for the next 24 hours.