July U.S. CPI Data Soon to be Released

Vice Chairman Clarida, the Fed’s second in command, and Board Governor Waller, both put their weight behind decreasing further economic stimulus due to optimistic inflation data, and increasing COVID-19 vaccination rates. This could suggest a strengthening, bullish USD against other currencies, IF the Fed takes its’ foot off the printers gas pedal.

Later this week on August 11, 2021, the monthly U.S. CPI inflation is going to be released.

Learn more by reading this article & and watching this video here:

https://www.xm.com/research/analysis/forexPreviews/xm/week-ahead-dollar-turns-to-us-inflation-data-144617

CAD/JPY to Sink

Cad/JPY is showing strong signs of an impending plummet as of August 9th, 2021. Here is a breakdown.

An initial analysis of our indicators is suggesting an upcoming drop on the 4-Hr chart. This could mean that for days, possibly even weeks to come, we can expect a strong bearish environment. On the indicator side of things, StochiRSI, as well as an overbought Money Flow Index reading is showing strong sell signals. The Aroon is also crossing, which is important to note, as it is usually a slower oscillator compared to the StochiRSI, so when both indicators are in agreeance, this is a strong sell indication. Our last point of contention is with the MACD indicator, which is suggesting some sort of movement, however, the MACD and Signal line have yet to officially cross.

Here is a closer look:

So why do we believe this is a sell signal?

The current trend of the price is suggesting that a new ‘Lower-Low’ is soon coming. Lower-highs have been consistently made, as you can see by looking at the numbers assigned to each lower high (suggesting the price is not strong enough to breach the latest high point means the market is trending downwards).

The latest Lower-high at #6, has not been breached. This could be due to a very strong support level (lines in yellow), that price seems to be having a hard time breaching. These factors are suggesting a downwards push the is greater then the previous Lower-Low. There is also a Head-&-shoulders pattern surrounding peak #6. Further indication of a downward push.

Another possible outcome is a very slow reversal into a bullish market. There is a low-point designated by the ‘question-mark’ that the bearish push would have to breach in order for the trend to remain an overall sell trend. If the downwards push cannot puncture through this low point, we can consider this a possible trend reversal or even an emerging side-ways market.

So when should we being to sell?

The StochiRSI, Aroon, and MFI indicators have already signals for a sell, however, slower oscilators like the MACD ad Aroon have yet to suggest this (as of 9:18AM CST 08/09/2021). Wiating for these inidcators to corrborate a similar signla is important as it acts as a confirmation to the signals from faster indicators.

We suggest waiting for the MACD to show a sell signal to hop in and become bearish in this market.

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