What I had expected to be the major Forex-related data release of the week has come in, with U.S. Inflation running at 0.1%, slightly less than the consensus estimate of 0.2%. The U.S. Dollar slipped a little on the news, especially against European currencies, but not by much. It seems that this is not going to be much of a tradable event.
I see the most interesting theme in the Forex market now as the long-term bullish trend in the USD/JPY, which made a new 6-month high today after recently coming to life. It had been a very weak trend, but it looks as if it is picking up.
The U.S. stock market often follows the USD/JPY currency pair and we are also seeing the major indices rise, such as the S&P 500, after some flirting with the key 200-day moving average indicator. This is probably going to be helped by the continuing low level of U.S inflation.
On a lighter note (for some), I’ve talked about the world cup as an England fan, so I can’t run away from it now. I congratulate Croatia on a well-worked victory. The returning England team will get a warm welcome back in London whether they win the playoff for third place against Belgium or not, which is due to take place this Saturday, but I think they had victory in their grasp in the first half-hour of the semi-final. They threw it away by defending deep and ceding the midfield to Croatia who have the best midfield player in the world in Luka Modric. I don’t think there was another turnaround in dominance between two teams as dramatic in any other match in the entire tournament. I hope it will be valuable experience for England’s remarkably young players.