CPI in focus.

The main event of the week is approaching, US CPI data. A 'soft' number will be hoped for, which will likely see the 'soft landing' narrative remain.

Whichever way it goes, the data will likely create volatility. The market is very sensitive to inflation data and a 'hot' number will throw the cat amongst the pigeons. And depending how 'hot', it won't take much for talk of a US rate cut later than September, possibly even a hard landing to re-emerge.

I do think the data warrants a 'pre event' anticipation trade. Placing stop orders to cover either outcome. Where I will likely place a 'buy stop' USD JPY to anticipate a USD positive release.

And a 'buy stop' AUD USD for a 'soft number' which would be USD negative.

It's important to be aware if your broker 'manipulates' spreads during the release. And the strategy comes with a higher risk of 'slippage'.

In other news, positive GDP data keeps the pound supported. The NZD weakness from yesterday has abated for now. The CHF and JPY are weak. And a 'CPI surprise' aside, JPY and CHF shorts remain very viable on pullbacks creating solid 1hr support.

Feel free to email any questions: johnelfedforexblog@gmail.com