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US CPI In Focus

Today might well prove to be a pivotal day for the US Dollar with both the March CPI release and March FOMC minutes due.  Inflation has been the catalyst behind the market’s shifting view of the Fed. With inflation having cooled sharply from last year’s highs, so too has the market’s projected rate oath softened. On the back of the inflationary drop in February and the banking sector turmoil which emerged in March, the US rates outlook has softened considerably. Today, traders will be looking to CPI to confirm a further drop in US CPI which should pave the way for either one further, smaller .25% hike from the Fed next month or an unchanged decision.
 

Forecasts For Today

On the numbers front, the market is looking for headline CPI at 5.1% annually, down from 6% prior. On the monthly readings, the market is looking for headline CPI at 0.2%, down from 0.4% prior, and 0.4% down from 0.5% prior. If such a decline is recorded today, the market impact should be a clear drop in USD along with a lift in risk assets.

One market in particular which looks set to benefit should today’s US CPI confirm a fresh drop is crypto. ETH has seen a strong rally off the March lows and has recently broken above the 1751.21 level which is a major pivot for the market. While above here, ETH looks poised for further gains near-term.
 

Technical Views

ETHUSD

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The rally in ETH has seen the market breaking above the 1751.21 level, moving higher within the large bull channel which has framed the recovery off last year’s lows. With momentum studies bullish, while price holds above the 1751.21 level, the focus is on a further push higher and a test of the 2018.21 level next. 

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