Booking Profit on Gold and Ethereum Signals, As US CPI Inflation Jumps to 9.1%

Almost all our forex signals closed in profit as US headline CPI inflation reached 9.1% in June

Skerdian Meta•Wednesday, July 13, 2022•2 min read

Cryptocurrencies stabilized yesterday after last week's decline

Today’s European session was pretty quiet for the most part, with markets awaiting the US CPI inflation report later in the day. The USD was steady earlier but saw some light weakness in the last hours leading to the CPI release, as there were some positioning flows ahead of the key economic release ahead of US markets open. EUR/USD stuck around 1.0040-60 mostly before jumping to 1.01 during the CPI release and then diving 100 pips lower to parity at 1, which held again.

NZD/USD H1 Chart – Heading to $1,000 After Failing at the 50 SMA

Will Ethereum push below $1,000 again?

We were long on the USD and short on Ethereum, NZD/USD , and Gold. All those signals hit the take profit target as the market made quite a reversal lower after the CPI inflation report was released. We sold ETH/USD a while ago as this cryptocurrency was retracing higher and

US June CPI Inflation Report

US CPI yy report June 2022

US June CPI YoY +9.1% vs +8.6% expected
May CPI YoY was 8.3%
m/m reading +1.3% vs +1.1% expected and +1.0% prior
CPI index at 296.311 vs 292.296 prior
Full report

Core CPI:

Core CPI YoY June 5.9% vs 5.7% expected
May core CPI YoY was 6.0%
Core CPI MoM 0.7% vs +0.6% expected
Core CPI for May was +0.6%

Details:

CPI energy +7.5% vs +3.9% prior
Gasoline +11.2% vs +4.1% prior
New vehicles +0.7% vs +1.0% prior
Used vehicles +1.6% vs +1.8% prior
Owners’ equivalent rent +0.6% m/m vs +0.6% prior
Food +1.0% vs +1.2% prior
Real weekly earnings -1.0% vs -0.7% m/m prior (revised to -0.9%)

Inflation is running hot again. This is the highest reading in more than 40 years, since November 1981. The FED funds futures market has quickly priced in a 23% chance of the Fed hiking 100 bps in two weeks. The details are important here. The CPI energy index rose 7.5% MoM, contributing nearly half of the total increase. Energy is up 41.6% YoY. Given where gasoline prices currently are, those numbers will reverse in July.

Otherwise, the vehicle component is worrisome as it remains high and rents continue to creep up. I’d be a bit more dismissive of the report if it was more food-driven but there are a few components pushing it upwards. Used cars are particularly surprising because the Manheim used car index was lower in the month. On headline shock alone, “above 9%” isn’t pretty for main street and the Fed will have a hard time softening its stance.

Ethereum Coin ETH Live Chart

ETH/USD

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Open a FREE Trading Account

ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.