A1 Trading Company

February 15, 2024

USD Ahead of PPI

Frank Cabibi

Tomorrow's PPI number will be another impactful factor on investor sentiment around dollar-based assets. We have already talked about CPI's recent influence on the markets, but here is what can happen tomorrow on a beat or miss scenario.

EdgeFinder Analysis

AU is now at -6, one point higher than yesterday's -7 due to economic numbers from Australia's economic numbers. Employment change jumped by over 63,000 jobs, however, unemployment rate went up.

Both retail and COT are bearish this week as February is notoriously a bearish month for the pair. US had also lower retail sales m/m which bullishly affected this pair. PPI is expected to be higher this month, which would correlate with the higher inflationary number earlier this week.

Gold comes up today to a resistance level at the $2000 mark. This could be a potential short setup on the 1D timeframe if price rejects the highs. After this week's CPI numbers in the US, it is relatively clear why the metal is in a bearish state.

With PPI news tomorrow, gold may see another leg down towards the $1970-80s level. Higher PPI - which is expected- could drive the bearish gold sentiment to end the week.

Unrelated to US, CHFJPY is the EdgeFinder's strongest bearish score. The pair was a bullish reading earlier this month before the score flipped. Japan has a slightly better labor situation than Switzerland as unemployment rate is coming down in Japan.

Japan has Switzerland beat in almost every category except retail sentiment and economy. February is historically the most bearish month for CHFJPY on a 10 year average.

Retail vs COT

On the AUDUSD pair, retail and COT sentiment has declined in the most recent week. Still, there is a net bullish stance from retail and a net bearish stance on COT.

Fundamental Spotlight

US unemployment numbers came in today lower than last month's number. This is a good sign for the labor market, and the trend is still continuing lower.

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