A1 Trading Company

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September 13, 2022

USD Still Strong from Inflation

Michael J. Donoghue
USD Still Strong from Inflation

This morning, at 8:30 am Eastern Time, the United States’ Bureau of Labor Statistics revealed that inflation had once again beaten expectations. Market forecasts had anticipated a 0.1% decrease in month-over-month CPI in August, whereas a 0.1% increase was the result. However, even bigger news was month-over-month Core CPI coming in hot at 0.6%, double the 0.3% increase that had been forecast.

With annual core inflation in the US currently sitting at 6.3%, sharp declines in volatile energy prices are still not enough to bring the country’s inflation train to a screeching halt. This gives the Federal Reserve further incentive to continue raising interest rates, which manifested in a surge of buying pressure for USD this morning as the US Dollar Index jumps 1% intraday. With even a technical recession and a rising unemployment rate unsuccessful in completely mitigating economic overheating, USD bulls may have fundamentals on their side for the near future.

Three Great Major Pairs

The following major pairs are ranked favorably for USD bulls by the EdgeFinder, A1 Trading’s software tool that provides supplemental analysis. Based on criteria ranging from fundamentals to trader sentiment, those who are bullish on USD may want to watch these pairs for potential opportunities to go long on the Greenback:

1) EUR/USD (Receives a -5, or ‘Sell’ Signal)

USD Still Strong from Inflation

2) GBP/USD (Receives a -5, or ‘Sell’ Signal)

USD Still Strong from Inflation

3) USD/JPY (Receives a 4, or ‘Buy’ Signal)

USD Still Strong from Inflation

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