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Trading volatility: EURUSD around US CPI

The big risk event to volatility in the coming week will doubtless be on Wednesday 15 May with US inflation data.

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The Fed believes, in increasing measure that US data is going to hold up even in the face of high interest rates. Headline rate forecast to stay at 3.5% core forecast to drop from 3.8 to 3.5% - could the risk be to the upside? IGTV’s Jeremy Naylor looks at EUR/USD.

(AI Video Summary)

US inflation data

Potential trading volatility stemming from US inflation data release on Wednesday, 15th May. The anticipation is that inflation figures might exceed expectations, influencing the Federal Reserve's stance on maintaining higher interest rates. Forecasts suggest a headline inflation rate of 3.5%, with core inflation also expected at 3.5%.

EUR/USD

The dialogue also examines EUR/USD movements, suggesting a possible reversal if inflation data surprises to the upside, affecting the dollar's strength. A specific trading strategy is articulated, considering the technical analysis of EUR/USD, with recommendations on placing stop losses and price targets ahead of the data release. This anticipation of inflation data underscores the critical relationship between macroeconomic indicators and currency market dynamics, with implications for interest rate decisions.

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