The US Dollar Is Weakening Following Inflation Data

FXOpen

Yesterday saw the release of key economic indicators for the US. According to ForexFactory:

→ Core Price Index (CPI) monthly: actual = 0.3%, expected = 0.4%, previous = 0.4%;

→ Core Price Index (CPI) annual: actual = 3.4%, expected = 3.4%, previous = 3.5%;

→ Retail Sales monthly: actual = 0.0%, expected = 0.4%, previous = 0.6%.

Concerns about rising inflation did not materialise. Reuters reports that unchanged retail sales suggest conditions are forming for interest rate cuts.

Financial markets reacted significantly, with the US dollar weakening:

→ As we reported yesterday, signs of slowing inflation increased market participants' belief in imminent rate cuts, leading to the S&P 500 stock index (US SPX 500 mini on FXOpen) reaching an all-time high;

→ Gold prices reached a high not seen since April 21;

→ Other currencies strengthened against the US dollar.

An interesting situation is developing on the USD/JPY chart. Applying Fibonacci ratios, we note three instances where price recovery halted around the 0.382 level:

→ Recovery from B to C following the impulsive decline from A to B;

→ Recovery from D to E after the impulsive decline from C to D;

→ Recovery from F to G after the 3-wave decline from A to F.

According to technical analysis of USD/JPY, these proportions indicate that demand is consistently fading with each attempt to restore the upward trend described by the blue channel.

Moreover, the local peak at G provides information about the median line, acting as resistance. Therefore, there are grounds to assume that bears will continue to dominate, pushing prices downward. If this scenario unfolds, lower support levels (151.85, 150.88, psychological level 150.00), as well as the lower boundary of the channel, will test the seriousness of the bears' intentions.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips (additional fees may apply). Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Stay ahead of the market!

Subscribe now to our mailing list and receive the latest market news and insights delivered directly to your inbox.

forex

Forex Trading with FXOpen

Forex Trading with FXOpen

Experience ECN technology for deep liquidity and light-speed trade execution

  • Access over 50 markets
  • Trade with spreads from 0.0 pips
  • Take advantage of commissions from $1.50/lot
Learn more

Latest articles

Analysts’ Tesla (TSLA) Price Predictions for 2026-2030 and Beyond
Trader’s Tools

Analytical Tesla Stock Price Predictions for 2026–2030

Tesla (TSLA) is

Forex Analysis

European Currencies Seek Stability Amid Rising Geopolitical Tensions

European currencies are showing mixed performance as they attempt to stabilise following their recent decline and the release of the Federal Reserve's latest meeting minutes. The minutes revealed growing concern over persistent inflationary pressures, with several policymakers supporting the possibility

Shares

Netflix: Attempting to Break the Short-Term Downtrend

Netflix is preparing to release its financial results for the second quarter of 2026. According to the company's official press release published on 15 June, the earnings report will be released on 16 July, followed by a video interview with

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.