FOREX Chart Of The Day: USD Index What’s Next?

The #USD has been ranging today ahead of the CPI reports, but what will happen to the #USDIndex if the news is good for the USD?

We are going to look at the US Dollar Index ahead of the CPI reports coming out tomorrow.

For the past few hours, we saw a lot of selling in the USD market. But now, we have a complete reversal. A lot of buying is coming into the market. The reversal happened because there were rumours that the CPI reports are going to be bad. That pushed some investors to sell the USD. But now, we’re starting to see the US Dollar rally again.

That just shows us how important the next CPI data is for the US.

Weekly timeframe

We need to look at different scenarios because in the weekly timeframe, the price has been in the same area for the past three to four weeks. We’re looking for a breakout. We need some direction for us to either buy or sell the USD.

Daily timeframe

In the daily timeframe, the price has been ranging within the past three weeks. If the price breaks to the upside, then the CPI data will likely be good for the USD. We’d then get a trend direction, and we could start looking for buying opportunities on the USD.

The strength meter also started to suggest that the USD is getting stronger. So, if we have that with good CPI data, I’ll be looking for a break above the recent swing highs, a retest, and a continuation of the overall uptrend.

The USD has been fluctuating recently as investors look to position themselves ahead of tomorrow’s CPI data. This data will give us a strong indication of the strength of the US economy. If it rises, then inflation will rise in line with the Fed wanting inflation over 2% If the CPI data is good, we will likely see a break of the highs and a change of the daily trend.

However, if the CPI data is bad, then we’ll likely see more downside. Even the lows around 89 USD will likely be tested after a breakout of the lows.

If the CPI data is negative, we will likely see the USD bearishness continue below $90.00.

Keep an eye on the CPI data tomorrow. It’s going to be a big report. Investors will look at it to see if the USD will break to the upside or if the bearishness will continue.

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About The Author

Jonathan Kibbler

Jon Kibbler, our Senior Market Analyst, boasts over a decade of trading experience. He specializes in dissecting the intricacies of financial markets and sharing his expertise with precision. Jon’s insights have been featured at renowned events and platforms like Coindex, Forex Analytix, and Forex.com.

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