Jump to content

USD/JPY shying away from 20-year high ahead of US CPI

Recommended Posts

The May reading for the consumer price index (CPI) in the US is expected to be a mover for the US dollar.



Daniela Sabin Hathorn | Presenter and Analyst, London | Publication date: Thursday 09 June 2022 

CPI expectations

The May reading for the consumer price index (CPI) in the United States is expected to be an important mover for the US dollar.

Analyst forecasts show the growth in the core reading softening slightly when compared to April, whilst the headline is likely to have continued to grow at a faster pace in May. This outcome would be a good reading for the economy.

Headline inflation, which includes volatile prices like energy and food, is expected to continue to pick up as the unresolved conflict in Ukraine keeps commodity prices at record highs. Policymakers are expecting this, and so are markets, and therefore the key focus is going to be on core inflation.

Whilst energy and food prices are a key part of consumer spending and, therefore, they have a big effect on the economy, the more volatile nature of these prices mean we are able to momentarily look past them if we know, or think we know, the main source of their elevated prices, which in this case is the war in Eastern Europe.

And so that is why markets are likely going to be focusing on this potential softening of core CPI, because we are happy to dismiss higher energy and food prices for the time being. If everything else is starting to show easing price pressures, then we may take it as a sign that stagflation – persistent high inflation and slowing growth – may not be such a big threat after all.

A core CPI reading below expectations of 0.5% would ease pressure on the Federal Reserve (Fed) to act too aggressively to combat inflation, potentially reducing the size of the rate hike at the meeting next week. In this case, the US dollar (USD) is likely to see a further pullback from recent highs.


This would play out nicely in USD/JPY, given the pair has been trading in a strong ascending pattern for the last two weeks. A pullback in the dollar may see USD/JPY back below previous resistance at 132.38, before finding some support at 130.00.

On the flip side, a stronger than expected reading would likely push up the pair even higher, with the January 2002 highs in sight at 135.18, confirming the current bullish pattern.

If the consumer price index comes in as expected at 0.5% then the US dollar is likely going to continue to be supported but the move higher may be short-lived.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 10:53

    Newest Member
    Joined 21/09/23 20:54
  • Posts

    • Stock market analysis and trading strategies: NASDAQ,QQQ, Apple (AAPL),Tesla (TSLA), Amazon (AMZN), Nvidia (NVDA), Microsoft MSFT, Meta Platforms, Netflix (NFLX), Alphabet GOOGL  Stock Market Summary: Further downside to complete the Wave c) of 4 correction (Indices) There are two different patterns for stocks, the stocks that have just topped like Alphabet, Amazon, Berkshire Hathaway are in their Wave a) of 4 and the other stocks are in the Wave c) of 4, that said Apple is slightly different, but can be tied into the Wave c) of 4 patterns. Trading Strategies: Short side Video Chapter 00:00  NASDAQ 100 (NDX) / QQQ / Berkshire Hathaway 06:27 Apple (AAPL) 07:34 Amazon (AMZN) 08:54 NVIDIA (NVDA) 10:08 Meta Platforms (META) 14:07 Netflix (NFLX)  15:37 Alphabet (GOOGL) 17:26 Microsoft MSFT 21:27 Tesla (TSLA) 24:45 End Analyst Peter Mathers TradingLounge™ Australian Financial Services Licence - AFSL 317817 Source: tradinglounge.com     
    • The "best" percentage of your investment portfolio to allocate to cryptocurrencies depends on your individual financial situation, risk tolerance, investment goals, and time horizon. There is no one-size-fits-all answer to this question, as what's appropriate for one person may not be suitable for another. Here are some considerations to help you determine the right percentage for your situation: Risk Tolerance: Cryptocurrencies are known for their price volatility. Consider how comfortable you are with the possibility of significant price fluctuations. Generally, if you have a lower risk tolerance, you may allocate a smaller percentage to cryptocurrencies. Financial Goals: Your investment goals play a crucial role in determining your crypto allocation. Are you investing for short-term gains, long-term growth, or a specific financial milestone (e.g., retirement)? The time horizon for your goals can influence your crypto allocation. Diversification: Diversification is a risk management strategy that involves spreading your investments across different asset classes. Diversifying your portfolio can help reduce risk. Experts often recommend not putting all your funds into a single investment, including cryptocurrencies. The specific percentage you allocate to crypto should consider the diversity of your overall portfolio. Knowledge and Research: Your understanding of cryptocurrencies matters. If you're well-versed in the crypto space and have confidence in your ability to evaluate and manage crypto investments, you might allocate a higher percentage. However, if you're new to cryptocurrencies, it's wise to start with a smaller allocation until you gain more experience. Financial Situation: Consider your current financial situation, including your income, expenses, and existing investments. Ensure that you have an emergency fund and meet your other financial obligations before allocating a significant portion to cryptocurrencies. Regulatory and Tax Considerations: Be aware of the regulatory and tax implications of cryptocurrency investments in your jurisdiction. Tax laws regarding cryptocurrencies can vary significantly, and it's essential to comply with them. Asset Allocation Strategy: Many financial experts recommend following a structured asset allocation strategy based on your risk tolerance and investment goals. This strategy might suggest a certain percentage for different asset classes, including stocks, bonds, real estate, and cryptocurrencies. Regular Review: Periodically review and rebalance your portfolio to ensure it aligns with your goals and risk tolerance. Cryptocurrency prices can change rapidly, so your allocation may need adjustments over time. Ultimately, there is no universally "best" percentage to invest in cryptocurrencies. It's a highly individual decision that should be made based on your unique circumstances and objectives. It's also important to conduct thorough research and consider seeking advice from a financial advisor or investment professional before making any significant changes to your investment portfolio.
    • Can orsted shares be purchased on the platform?
  • Create New...