Forex Signals Brief June 13: UoM Inflation Expectations in Focus After Soft CPI and PPI

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Investors are closely watching the upcoming University of Michigan consumer sentiment report, as inflation expectations remain a critical gauge amid recent mixed inflation data.

US Dollar Weakens Amid Mixed Economic Data and Geopolitical Concerns

The US dollar took a sharp dive on Thursday as a series of disappointing economic reports weighed heavily on market sentiment. A lower-than-expected Producer Price Index (PPI) reading, combined with initial jobless claims exceeding forecasts for the third week in a row, acted as catalysts for the sell-off. These data points contributed to the euro rallying to its highest level in over three and a half years, reaching 1.1631.

However, the dollar’s decline wasn’t solely driven by economic numbers. Selling pressure began earlier in the day amid escalating fears of a potential conflict between the United States and Iran. Meanwhile, the ongoing US-China trade talks failed to inspire optimism, with two days of discussions resulting only in a reaffirmation to honor the earlier Geneva agreement, which markets viewed as a non-event.

Euro Breaks Key Resistance, USD Faces Broader Weakness

The euro finally gained solid momentum when it breached the psychological 1.1500 mark, a level that had acted as strong resistance in recent weeks. This breakout triggered a wave of buying and stop orders, pushing the euro higher. The dollar’s overall softness was also reflected in falling interest rates across US Treasuries, further undermining the greenback. Notably, a strong 30-year Treasury auction supported the lower yields, signaling ongoing demand for US government debt despite the weak dollar.

This environment also favored other asset classes. Gold prices benefited from the weaker dollar, while equity markets edged higher, led by gains in the Nasdaq.

Today’s Forex Market Events: Inflation and Consumer Sentiment in Focus

Today, investors are eyeing the US Preliminary University of Michigan (UoM) Consumer Sentiment report, expected to show a modest rise from 52.2 last month to 53.5. Given the recent soft inflation data from the Consumer Price Index (CPI) and PPI, the inflation expectations embedded in the UoM survey will be closely watched. Last month, inflation expectations ticked up to 7.3% but were later revised downward to 6.6%, highlighting ongoing uncertainty about inflation’s trajectory.

Last week, markets were slower than what we’ve seen in recent months, with gold retreating as a result, the EUR/USD jumping close to 1.15 but returned back to 1.14 this week, and stock markets continued upward too. The moves weren’t too big, but we opened 37 trading signals in total, finishing the week with 25 winning signals and 12 losing ones.

Gold Gains 1% on USD Weakness

Gold continues to consolidate near its 50-day simple moving average (SMA), which is currently providing strong support around $3,255. A successful move above $3,400 could pave the way for gold to retest its April highs above $3,500. Conversely, a drop below $3,120 may trigger renewed safe-haven demand, potentially driving prices back up.

The 50 SMA Rejects USD/JPY

In a divergence from typical interest rate-driven moves, the USD/JPY currency pair climbed from 143.40 to 144.31. Analysts attribute this rise to portfolio reallocations and capital outflows from Japan, underscoring how geopolitical risks and flow-driven dynamics are outweighing traditional rate differentials in currency markets.

USD/JPY – Daily Chart

Cryptocurrency Update

Bitcoin and Ethereum Reflect Broader Macro Anxiety

Bitcoin surged past the $110,000 mark earlier in the week, gaining over 6% as investors sought alternatives amid geopolitical tension, rising debt levels, and U.S. economic uncertainty. However, the rally lost steam at the 20-day moving average, with BTC sliding back to around $100,000.

BTC/USD – Daily chart

Ethereum Retests the 200 SMA

Ethereum also joined the uptrend, rising more than 20% since April. This surge has been fueled by renewed institutional interest following the successful rollout of the Pectra upgrade, which improved wallet functionality and staking processes. These enhancements have increased Ethereum’s technical momentum and strengthened its long-term appeal. Still, the 200-day SMA remains a significant hurdle, and the most recent attempt to break higher was rejected at this resistance level.

ETH/USD – Daily Chart

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.

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