United States Core CPI m/m April 13 2021

What does the data mean to the market?

The Core Consumer Price Index (CPI) measures the changes in the price of goods and services, excluding food and energy. The CPI measures price change from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.

A higher than expected number is positive/bullish for the USD, a lower than expected number is negative/bearish for the USD.

There are 4 lines of data.

Headline CPI - Core (M/M)
CPI - Core (Y/Y)
CPI - (M/M)
CPI - (Y/Y)

Historic Deviations and Their Outcome

March 10 2021 We got a +0.1 on both core lines gave a nice 15 pip move on USDJPY ; that's a really nice move for such a small deviation, shows how hot this data is becoming.

See Chart here:
https://calendar.galaxysoftwareinc.com/#/chart;i=33216;t=2021-3-10%2013:30:00.0;s=USDJPY;r=M1

February 10 2021 Check out last months 0.2 deviations, and bear in mind that I expect the same deviations to create a better reaction today!
We can see a small but gradual move over the first one minute.

See Chart here:
https://calendar.galaxysoftwareinc.com/#/chart;i=28287;t=2021-2-10%2013:30:00.0;s=USDJPY;r=M1

November 12 2020 Most of last year, the same deviations were not moving the market, as conditions were very different then, but I believe the focus is back.

See Chart here:
https://calendar.galaxysoftwareinc.com/#/chart;i=24281;t=2020-11-12%2013:30:00.0;s=USDJPY;r=M1

My Forecasts For Today

CPI - Core (M/M) 0.2
CPI - Core (Y/Y) 1.5
CPI (M/M) 0.5
CPI (Y/Y) 2.5

Today's Trade Plan

The focus is on CPI - Core (M/M) - Headline.

I’m looking for a Deviation of 0.2% or greater in either direction from the forecast of 0.2% to take a trade.

So, an actual figure of 0.0% to Sell USD or 0.4% to Buy USD.

We would need to confirm no conflict on any of the other three lines!

CPI - Core (Y/Y)
CPI - (M/M)
CPI - (Y/Y)

If they all lineup, we should bank some good pips today.

Tradable Pairs

USDJPY

Hope this helps but please do your own analysis!!

Good luck!!

James Thatcher

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

We got a positive 0.1 deviation on all four lines of data which caused an excellent spike up in USD pairs, but this was very short-lived and made trading very difficult.

I suspect that this was because, shortly before the trade time, reports revealed that the Johnson and Johnson vaccine was potentially causing blood clots. An impromptu press conference was scheduled 30 minutes after the US CPI release time. Therefore the market ignored the positive CPI data in anticipation of the press conference.

The vaccines are essential to US recovery; any news that calls any interruption to that program into questions will overshadow backwards-looking data. For me, I had a minor loss, as I took a trade regardless. Maybe if we got a 0.2 deviation, that would have been enough to create a sustained move. It shows the importance of being aware of what else is happening in the market. Please pay attention to any event that could shift the focus away from the data we are trading.  

Losses will always happen; luckily, only a slight loss and my overall position on the year is still in profit.

James Thatcher

See Chart here:
https://calendar.galaxysoftwareinc.com/#/chart;i=38254;t=2021-4-13%2012:30:00.0;s=USDJPY;r=S2