US PPI Up Next
The next round of tier-one US data is due today with the release of the October PPI (headline and core). PPI readings have been attracting a lot of attention over recent months given the supply chain issues and energy crisis which have gripped the world. As a result of this, prices have been steadily rising for producers, feeding into the inflationary spike which dominated Q3, leading to increased central bank tightening expectations.
This time around, the market is looking for the headline reading to move to 0.5% from 0.4% prior and the core reading to jump from 0.2% to 0.5%. With this in mind, there is room for USD to find a bid if data shows an improvement. Moreover, if we see an upside beat, this would likely help curtail the USD decline. Alternatively, a weaker than expected reading would likely be sharply negative for USD in the near term ahead of tomorrow’s CPI data.
Where to Trade US PPI?
USDCAD
The breakdown below the bull channel in USDCAD saw price trading as low as sub 1.2368 before price began to correct higher. The market is currently trading within a corrective bull flag formation against the prior decline, suggesting the risk of an eventual breakdown and continuation of the bear trend. With this in mind, bears can trade a break of the 1.2368 level targeting 1.2243 initially.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.