EURO/USD-----WILL A REVERSAL BE INITIATED BY THE UPCOMING US CPI RELEASE ??

US CPI Release : 12:30  GMT, FRIDAY, 16 /July /2010

The datas are listed below:

US  CPI m/m (June)        * Forecast(consensus)- 0.1%     Previous 
0.1%  ( from Dept of Statistics)
US  CPI y/y (June)           *Forecast(consensus)  1.2%      Previous 2.0%(from dept of Statistics)
US Core m/m(June)          *Forecast(Consensus) 0.1%     Previous 0.1%(Statistics Dept)
US Core y/y (June)           *Forecast(Consensus) 0.9%      Previous 0.9%(Statistics Dept)
Note: ** Figure extracted from Dailyfx.com 


ACTION:  If  0.2%  or  above  US Core (m/m )   Buy  USD/JPY  
                
                 If  0.0%  or  below   US  Core (y/y)     Sell  USD/JPY    Sell  EURO/USD        


To trade this upcoming CPI news , We would normally wait for 10 minutes after the news release.
On M5 chart, executing the trade on the appearing of the Third candle in the direction of the trend.

Generally, The up/down trend  after the news release would persist  for  4-8 hours before coming back to its status quo.

The recent downgrading by FOMC on the US GDP numbers, and the unfavorable unemployment figures FORECAST, will fueled the negative sentiments on the Dollars outlook. As such, if this CPI release is Bullish, then a gradual reversal from  the Dollar's weakness can be initiated.


From our analysis,  the present sentiments on Dollars  is rather Negative to Neutral, We estimate that the CPI is around -0.1 % approximately.

The Euros/Usd  is now  consolidating  around  1.3000-1.3050, being the possible Top , In view of the fact that there is nothing /no major change on both Euros  and Dollars structurally ( In Term of Economy/ Fiscal balance) since the recent dip at 1.1870, and generally this currency pair's bearishness near term is still valid , as such the retesting of the recent low at 1.1870  may come sooner than expected.