US CPI Trumped by geopolitical events

Donald Trump

Today’s focus turns to the AUD

The US CPI data turned out to be a fizzer with the slightly weaker -0.1% result (forecast 0.0%) offset by stronger ‘real weekly earnings’ data.

But the whole trading opportunity around the US CPI was basically derailed before the event as Trump once again used his Twitter account to threaten Russia and Syria declaring that missiles “will be coming”.

This saw USDJPY dip with the safe-haven trade back in play once again.

So where to now?

The good thing we saw yesterday was the major currency pairs reacting to the economic data that was coming out, albeit only small moves, it’s good to see them move ‘normally’ with the data releases.

Of course, we have to be aware of the growing Syrian issue whilst the US – China trade dispute takes a back seat, but still has the potential to flare up especially whilst Trump has access to Twitter!

So I’ll be looking closely at the economic data scheduled and focusing on the pairs with good technical trendlines. I am still thinking the ‘false break’ trading strategy is the best to use at the moment.

NOTE: These are by no means ideal trading conditions. So remain patient and if you do see an opportunity play it safe and decrease your trade size. It makes sense when currency direction is coming from Trump’s twitter account.

Check our Next Best Trades Watchlist for full details as to which specific pairs we are focusing on.

Asian Session

Traders will be focusing on the Nikkei, USDJPY & JPY crosses. That’s where the action is at the moment.

Any updated news suggesting an increase in tension should see USDJPY & JPY crosses continue to fall, and vice versa.

We also have some key Housing data out of Australia and with the AUDUSD having good technical setups it could be a good trading opportunity.

European Session

We’ve got a mixture of UK and EUR releases with central bankers from both sides speaking through the day.

There is, of course, the ECB Monetary Policy Meeting Accounts but they have proven to be lackluster of late.

Sterling and Euro are in limbo and waiting for a defining fundamental release to give them clear direction. If we don’t get clear ‘data’ (and there is none scheduled) then they should continue to wash around directionless.

North American Session

Trump is creating all the tension abroad so it’s wise to pay attention to what’s going on in this session.

We have the weekly jobless claims number scheduled and that’s it.

So direction will come from ‘Trump’. That means keeping an eye on the news and US equities – that’s where the impact is first felt.

Just remember An increase in tensions = Risk-Off, a decrease in tensions = Risk-On.

Technical Set Up – What’s Happening with the Majors

US CPI Trumped by geopolitical events

Plan the Trade, Trade the Plan!

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Your Daily Analysis needs to become habitual – For full guidance on our daily routine click here.

Make sure you don’t waste unnecessary time in front of the screens.

Remember you need to be fresh, confident and ready to trade and by sitting aimlessly in front of your screens you will become stale and uncertain.

The key to your success: Isolate the opportunities that work for you and focus on them.

Don’t worry about things that you can’t make…..chasing them will only cause problems (tiredness & irrational behavior will take over).

Tune up your charts & get ready to trade…..see you in the 247 Trade Zone!


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