Today, simultaneously with the opening of the US session, the May data of the US personal consumption price index will be published. The index is considered the Fed’s preferred inflation measure.
The core price index (YoY) is expected to decrease to 2.6% in May from 2.8% in April. The MoM value is expected at 0.1% compared to April’s 0.2%.
Forecast estimates indicate expectations of further slowdown in inflation and if they are confirmed when the actual values are published, it will strengthen EURUSD. In many ways, these expectations are already factored into the currency pair’s price, but it means there will be a strong price movement in the opposite direction if the actual values indicate a strengthening of inflation.
We can assume a scenario in which the value of the core index (YoY) comes in above 3.0%, and the MoM value is above 0.2%. In this case, EURUSD will weaken to the level of 1.0600.
CFD sentiment on EURUSD today is 61% of positions to buy and 39% to sell. A sharp decline in quotes will close the positions of buyers on stop orders, which will strengthen the EURUSD decline.
The final recommendation is to sell EURUSD, if the value of the core PCE price index in the US (YoY) comes in above 3.0%, and the YoY value is above 3.0%.
The profit could be fixed at 1.0600. The Stop loss could be placed at 1.0750.
It’s suggested to limit the trading volume to no more than 2% of your deposit funds.
