EUR/USD binary signal - U.S. Inflation rate - 12 Jun 2018

The monthly inflation figures from the U.S. will be released today at 13:30 GMT. According to the economists polled, consumer prices in the U.S. are forecast to rise at a modest pace.

On a month over month basis, the U.S. inflation is expected to rise 0.2% in May. This follows a modest increase of 0.2% in April. However, on an annualized basis, the U.S. inflation rate is expected to advance at a pace of 2.7%. This marks a strong increase from 2.5% annual inflation increase in April.

Core CPI, which strips the volatile food and energy prices are expected to rise 0.2% on a month over month basis as well. This marks a slight increase from 0.1% that was registered in April.

On an annualized basis, the core inflation rate is expected to rise 2.2% in May, advancing from the 2.1% increase registered the month before.

Consumer prices in the U.S. have been steadily increasing. Today's data comes ahead of Wednesday's FOMC meeting where the central bank is widely expected to hike rates by 25 basis points.

Today's data is not likely to influence the markets much given the fact that the Federal Reserve targets the core PCE price index. The core PCE price index has also risen to the Fed's 2% inflation target rate. While this might bullish for the U.S. dollar, the Fed had signaled that it will remain tolerant of an inflation overshoot above the 2% inflation target rate.

Other measures of inflation also suggest that consumer prices are rising sharply and with a strong labor market, higher wages are expected to put more spending power for the consumers in the U.S.

Based on the above, today's trading signal is EURUSD, the common currency has turned flat ahead of other important events this week. Still, we expect to see some near term pullback to 1.1800 following which we expect the EURUSD to post declines.

References: monthly inflation data
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