US PCE Up Next
On the back of a lacklustre FOMC and a disappointing GDP release this week, the Dollar is on the back foot heading into today’s release. PCE data is key to the Fed’s inflation calculation and so the release holds the potential to cause market volatility. However, given the Fed’s message earlier in the week, it would take a dramatic upside beat to cause any USD rally today. With this in mind, the better opportunities will likely be found in selling USD should data undershoot expectations.
Where to Trade US PCE?
USDJPY is sitting on a ledge of support at the 109.42 level. The correction from recent highs has been fairly laboured, suggesting room for a continuation lower. However, should data disappoint today there is room for a drop lower to clear out any built up stops. Should price break below the 109.2 level, bears can look for a test of the 107.91 level next.