PPI, TICS data tonite

Forex traders, brace yourself for moderate volatility today, whether you like it or not. Today we will be seeing some important US numbers: PPI and Empire Mfg at 1230GMT (+8 for SG time) and Treasury International Capital flow (TICS) at 1300 GMT. Focus will be on the key PPI data, which gives some clues about inflation, and the TICS data, which tracks foreign demand for US debt and assets.

Expect some bidding for EUR/USD around 1.2660-1.2680, and should 1.2660 give way today with trigger of news, we can expect EUR/USD to rest around 1.2580-1.2600 which is the area of support on the up trendline on the daily chart. What, am I playing pundit here?

We still have 3 more Fed meetings till the end of this year, and the futures market has now priced in 37% probability that the Fed will raise rates to 5.5% at the Sept 20 meeting, as compared to 25% odds at Friday’s close. Meanwhile, crude oil prices have fallen to near $73, as a truce to end fighting between Israel and Hezbollah entered its second day today, while BP said it would keep half its Prudhoe Bay oilfield pumping in Alaska, the largest in North America, while it carries out pipeline repairs, instead of a full shutdown for repair works.

Today the Forex market will be quite wild, but will be more so tomorrow.

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