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United States Core CPI m/m August 11 2021

What does the data mean to the market?

The Core Consumer Price Index (CPI) measures the changes in the price of goods and services, excluding food and energy. The CPI measures price change from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.

A higher than expected number is positive/bullish for the USD, a lower than expected number is negative/bearish for the USD.
There are 4 lines of data.

CPI - Core (M/M) - Headline
CPI - Core (Y/Y)
CPI - (M/M)
CPI - (Y/Y)

Historic deviations and their outcome

July 13 2021 Strong 0.5 positive deviation with support from the other 3 lines created a reasonable and safe move on many pairs, especially EURUSD.

Check out the price action here:

June 10 2021 Reasonable deviation but a little continuation on USD pairs, this was largely due to the fact that The US Federal Reserve Board indicated it will look through positive inflation, and won't change monetary policy on the back of high inflation. Therefore a sell would have been better on this release.

Check out the price action here:

May 12 2021 We saw a massive positive +0.6 deviation on the headline Core CPI M/M with a supporting positive deviation of +0.7 on the Core CPI Y/Y without conflicts on all secondary lines.

I got a great 29 pip move in the first minute, with the price pushing higher for some nine minutes after the trade, giving plenty of opportunities to choose the best possible exit.

With significant deviation, big initial move, and lots of continuing price action, the perfect storm makes it virtually impossible not to make money.

Check out the price action here:

I will use forecasts of:

CPI - Core (M/M) 0.5
CPI - Core (Y/Y) 4.3
CPI (M/M) 0.5
CPI (Y/Y) 5.3

Today's trade plan

The focus is on CPI - Core (M/M) - Headline.

Today I'm looking for a deviation of 0.4% to trigger a buy or sell on USDJPY.

I will confirm that all others line deviates in the same direction, I will not accept a conflict on any other three lines!

Secondary Lines -
CPI - Core (Y/Y)
CPI - (M/M)
CPI - (Y/Y

If they all lineup, we should bank some good pips today.

With year on year inflation standing at nearly double the average inflation in normal times. I don't believe the markets will tolerate any more hyperinflation. Therefore, Today either buys or sells will work with a trigger of 0.4%

Tradable pairs


Hope this helps but please do your own analysis!!

Good luck!!

James Thatcher

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.


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