The US's consumer price index was much higher than expected in the month of June at 0.9%, the largest monthly rise in inflation since 1981. Signs of a weakening dollar is still pumping demand into the USD and the stock market as far as this morning, and volatility is expected for the rest of the day for USD pairs. Compared to other major countries, the US has the highest inflation at 5%.
As inflation rises, investors look to the Fed to tell us what they expect to do with their current monetary policy. A higher CPI means that we could see a rise in interest rates- or in this case- more than two hikes by 2023. Odds are that the Fed will continue to downplay inflation and the dollar could come back down. However, it would be bullish for the dollar if Powell promises more hikes or sooner-than-expected hikes. We will have to wait for what the Fed decides to do in their testimony tomorrow. Overall, this news is probably not as bullish for the dollar as it is gold since a weaker dollar is all investors see right now. Speculation of more hikes is still speculation.
The dollar index already showing major rejection from the highs for the day and possibly forming its right shoulder in a head and shoulders pattern. Support is at around 92.32 if price can't hold itself up for the day.
UJ is coming way off highs for the day after a major spike in the USD pairs. Price is coming down to support after failing to close above resistance. Support lies under at its 200 SMA on the 4H chart and further support around 109.786.
UC is still in an uptrend from June, and price is up 0.47% on the day. The pair does look like it's pulling back from the highs, and major support is at 1.24867 if price continues to dip.
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