What to expect from the forex market after lower than expected CPI release? 

The U.S. dollar experienced significant losses as October's inflation data hinted at the Federal Reserve concluding interest rate hikes. The dollar index dropped 1.50% to its lowest since September. October's consumer price index (CPI) showed a flat monthly change and a 3.2% increase over the previous year, with core CPI slightly below forecasts at 0.2% and 4%. U.S. Treasury yields fell, with the 10-year yield dropping over 18 basis points to 4.4%. Analysts suggest the Fed might halt rate hikes due to soft inflation and tight financial conditions, with markets anticipating rate cuts in May 2024.

GBPUSD - D1 Timeframe

GBPUSD on the Daily timeframe chart, as seen above, is currently trading within a supply zone. The 100-day moving average provides additional confluence for a possible bearish momentum. Another considerable confluence is the fact that the 50-day moving average is currently below the 100 and 200 period moving averages.

Analyst’s Expectations: 

Direction: Bearish

Target: 1.22481

Invalidation: 1.25577

EURUSD - D1 Timeframe

When a trendline supports gets broken, it flips over and becomes a resistance - this is basic break-and-retest knowledge. Considering that price is retesting the trendline resistance whilst inside a supply zone - as seen in the chart -  adds further confirmation to the possibility of a drop in prices.

Analyst’s Expectations: 

Direction: Bearish

Target: 1.07090

Invalidation: 1.09564

USDCHF - D1 Timeframe

The Daily timeframe of the USDCHF chart is currently approaching a demand zone. A few other confluences to consider in favour of the bullish movement include; the trendline support, the 100-day moving average support, and the 88% of the Fibonacci retracement level.

Analyst’s Expectations: 

Direction: Bearish

Target: 0.90069

Invalidation: 0.88306

CONCLUSION

The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.

TRY TRADING NOW

You can access more trade ideas and prompt market updates on the telegram channel.

Author: Adetola-Freeman Ogunkunle

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