Source: PaxForex Premium Analytics Portal, Fundamental Insight
The US CPI for July is predicted to rise 0.2% monthly and 8.7% annualized. Forex traders can compare this to the US CPI for June, which increased 1.3% monthly and 9.1% annualized. The US Core CPI for July is predicted to expand 0.5% monthly and 6.1% annualized. Forex traders can compare this to the US Core CPI for June, which rose 0.7% monthly and 5.9% annualized.
US Wholesale Inventories for June are predicted to increase 1.9% monthly, and Wholesale Trade Sales by 0.9% monthly. Forex traders can compare this to US Wholesale Inventories for May, which rose 1.8% monthly, and to US Wholesale Trade Sales, which expanded 0.5% monthly.
US Crude Oil Inventories for the week ending August 5th are predicted at 0.073M. Traders can compare this to US Crude Oil Inventories for the week ending July 29th, reported at 4.467M. US Gasoline Inventories for the week ending August 5th are predicted at -0.633M and US Distillate Stocks at -0.667M. Traders can compare this to US Gasoline Inventories for the week ending July 29th, reported at 0.163M, and to US Distillate Stocks at -2.400M.
Inflation data will dominate trading today, beginning with German CPI data for July, followed by Italian and US readings. Central banks have tightened monetary policy, and some market participants believe we have passed peak inflation. The strong US labor market likely added wage-based inflation, as evident in the unit labor costs data for the second quarter yesterday. While inflation may ease off of its peak, it is likely to remain at historical levels for the rest of 2022 and 2023.
The forecast for the Dow Jones 30 turned bearish after its bear market rally took price action into resistance, while the last two W1 candlesticks formed bearish patterns. Volatility should increase, but the flat Kijun-sen suggests the absence of short-term upside momentum, while the Tenkan-sen continues to drift higher. The Ichimoku Kinko Hyo Cloud saw a bullish crossover with the ascending Senkou Span A moving above the flat Senkou Span B, a move likely to result in a false crossover and reversal amid growing bearish pressures. Traders should monitor the CCI after it has formed a negative divergence in extreme overbought territory, followed by a breakdown below 100. An accelerated move to the downside could print a lower low, confirming the bear market gained strength. Can bears force the Dow Jones 30 into its horizontal support area and challenge the June lows? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the Dow Jones 30 Index remain inside the or breakdown below the 32,570 to 33,360 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 32.765
- Take Profit Zone: 29.645 – 30.135
- Stop Loss Level: 33.795
Should price action for the Dow Jones 30 Index breakout above 33,360, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 33.795
- Take Profit Zone: 34.620 – 35.045
- Stop Loss Level: 33.360
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