empty
InstaForex - Official partner of Dragon Racing
InstaForex - Official partner of Dragon Racing
This section is designed for those who are just starting their trading journey. InstaForex educational and analytical materials will meet your training needs. Our experts' recommendations will make your first steps to trading success simple and clear.
Start as Beginner
How to start trading
Useful information
Training and recordings
InstaForex innovative services are an essential element of productive investment. We strive to provide our clients with advanced technical capabilities and make their trading routine comfortable as we are recognized as the best broker in this regard.
Become Investor
PAMM System
ForexCopy System
Passive investments
Partnership with InstaForex is beneficial and top-tier. Join our affiliate programs and enjoy bonuses, partner rewards, and the possibility to travel with the team of the world-renowned brand.
Become Partner
Main Page
Partner Area
Advantages for Affiliates
Registration
This section contains the most lucrative offers from InstaForex. Receive bonuses when topping up an account, compete with other traders, and get real prizes even when trading in a demo account.
All Promo Campaigns
Bonuses
Contests
Events
Holidays with InstaForex are not only pleasant but also useful. We offer a one-stop portal, numerous forums, and corporate blogs, where traders can exchange experiences and become successfully integrated into the Forex community.
Full details
Forums
We are in social networks
Forex humour
Forex Portal
InstaForex is an international brand created in 2007. The company provides services for online FX trading and is recognized as one of the world's leading brokers. We have won the trust of more than 7,000,000 retail traders, who have already appreciated our reliability and focus on innovations.
Learn More
History
Why Choose Us
InstaSport
Regulation
Company News
Awards
InstaForex Stars
InstaForex Offline
Headquarters
Key documents
Social Responsibility
10.04.2024 11:58 PM
Dollar spreads its wings
Open trading account Open demo account

The EUR/USD fell after the U.S. inflation report showed that consumer prices picked up for the third consecutive month. The Consumer Price Index rose 0.4% from the previous month and the all-items index was up 3.5% over the last 12 months, both exceeding Bloomberg forecasts. The same applies to core inflation data. As a result, the U.S. dollar strengthened across the market, and what was actively rising on Tuesday had now fallen in unison. We're talking about oil, gold, and bitcoin. Shortly thereafter, the same fate will befall the S&P 500.

Dynamics of U.S. Inflation

This image is no longer relevant

Just as the Bloomberg experts were wrong about the U.S. GDP, the Federal Reserve stumbled due to inflation. At the end of 2023, analysts forecasted the economy to expand by 0.9%, but by spring, the figure had grown to 2.2%. Fed Chief Jerome Powell had long considered the January-February surge in consumer prices a temporary phenomenon linked to seasonal adjustments. However, the March reports will surely convince the central bank otherwise. The market is already convinced.

Before the key release, derivatives gave a 50% chance of a federal funds rate cut in June, but after CPI picked up, the odds plummeted to 19%. Moreover, the risks of a Fed rate cut in July fell to less than 50%. Investors are betting on September and are counting on just two interest rate cuts in 2024! Isn't this a reason to buy the U.S. dollar?

The expected scale of the Fed's monetary easing

This image is no longer relevant

Everything that was surging against the dollar is now doomed to fall. The main drivers of the rally in the S&P 500, cryptocurrencies, and commodity assets at the beginning of the year were based on expectations of 6-7 acts of monetary easing by the Fed. Now, only two of them remain. If inflation accelerates once again there will be none left. Such a development is quite possible.

The Fed settled with its dovish stance. It wanted to buy time and see the future dynamics of CPI and PCE, but in the end it got record highs on the U.S. stock market. This weakens financial conditions and contributes to price increases. Simultaneously, oil and gold prices confidently moved higher, which, in the case of oil, creates a tailwind for inflation. Add to this a strong labor market and economy, the Fed may need to resort to actions like bringing back rate hikes instead of cutting them.

This image is no longer relevant

JP Morgan warns that inflation could remain elevated for a longer than expected. Armed conflicts in Ukraine and the Middle East lead not only to disruptions in supply chains but also to an increase in military spending by governments. As a result, the bank does not rule out that the federal funds rate could return above 8%! Let's go back to the 1990s!

Technically, on the EUR/USD daily chart, a selling strategy clearly worked on a break below support at 1.0845. The base of the pin bar was also located there. A breakout beyond the fair value range of 1.0765-1.0915 will be the basis for increasing short positions. Targets are set at 1.0600 and 1.0500 levels.

Marek Petkovich,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
All Analytics
Analytical News
US Market News Digest for May 2 US equity indices continue to climb despite lingering economic uncertainty. Investor optimism is being driven by expectations of progress in trade talks between the US and China. Nevertheless, ongoing economic
Ekaterina Kiseleva
13:14 2025-05-02 +02:00
1375
Forecast
USD/JPY: Simple Trading Tips for Beginner Traders on May 2nd (U.S. Session) Trade Analysis and Advice for the Japanese Yen The test of the 145.05 level occurred when the MACD indicator had already moved significantly below the zero mark, which limited
Jakub Novak
12:24 2025-05-02 +02:00
1690
Breaking Forecast Trading Plan Cryptocurrencies USD/RUB Russian Economy Video Analysis
Trading Instruments
EURUSD GBPUSD USDCHF USDCAD USDJPY AUDUSD EURGBP EURJPY NZDUSD EURNZD Silver Gold #CL #USDX COVID-19 Bitcoin
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

EUR/USD: Analysis and Forecast

The EUR/USD pair is attracting buyers today, breaking a three-day losing streak and attempting to build intraday momentum above the psychological 1.1300 level. This indicates a renewed interest from buyers
Irina Yanina 11:59 2025-05-02 UTC+2

U.S. Labor Market Data Could Be a Major Disappointment

Employment growth in the U.S. likely slowed in April, although the unemployment rate is expected to remain unchanged, pointing to healthy but moderate demand for labor. However, the Trump administration's
Jakub Novak 10:08 2025-05-02 UTC+2

The ECB Has No Other Choice

The European currency continues to lose ground against the U.S. dollar as traders increasingly place bets on the European Central Bank's upcoming monetary policy decisions. According to data, the chances
Jakub Novak 10:03 2025-05-02 UTC+2

China Has Finally Responded

The euro, the pound, and other risk assets reacted with gains following statements from Chinese authorities that they are assessing the possibility of trade negotiations with the United States—marking
Jakub Novak 09:57 2025-05-02 UTC+2

The Process Has Begun. China Is Ready for Trade Talks (There's a Chance of Renewed Decline in Gold and EUR/USD Prices)

Trading on the last day of the week is unfolding positively. News that China is ready to begin negotiations has inspired investors to buy risk assets and weakened the U.S
Pati Gani 09:43 2025-05-02 UTC+2

The Market Enters Turbulent Waters

The market is confident that tariffs won't materialize or that companies can pass them on to customers. The S&P 500's eight-day rally—its longest since August—strongly hints at this. So does
Marek Petkovich 09:24 2025-05-02 UTC+2

What to Pay Attention to on May 2? A Breakdown of Fundamental Events for Beginners

Only a few macroeconomic events are scheduled for Friday, but some are quite significant. Naturally, the focus is on the U.S. NonFarm Payrolls and unemployment rate, yet it's also important
Paolo Greco 09:14 2025-05-02 UTC+2

GBP/USD Overview – May 2: The U.S. Dollar Didn't Rise for Long

On Thursday, the GBP/USD currency pair continued to decline. The dollar had strengthened for three consecutive days—despite having no objective reason. U.S. macroeconomic data has been consistently weak; there were
Paolo Greco 03:50 2025-05-02 UTC+2

EUR/USD Overview – May 2: The Dollar Faces a New Collapse – And It's Far from the Last

On Thursday, the EUR/USD currency pair once again traded relatively calmly, but the U.S. dollar failed to show any meaningful growth this time. A little bit of good news goes
Paolo Greco 03:47 2025-05-02 UTC+2

USD/JPY: A Rough Patch for the Yen

At its latest meeting, the Bank of Japan kept all key policy settings unchanged, effectively implementing the most expected baseline scenario—despite earlier conflicting statements from central bank officials
Irina Manzenko 01:19 2025-05-02 UTC+2

Top analytics

Relevance up to 06:00 UTC--4
USD/JPY: Simple Trading Tips for Beginner Traders on May 2nd (U.S. Session)
12:24 2025-05-02
Forecast
Relevance up to 06:00 UTC--4
GBP/USD: Simple Trading Tips for Beginner Traders on May 2nd (U.S. Session)
12:19 2025-05-02
Forecast
Relevance up to 06:00 UTC--4
US Market News Digest for May 2
13:14 2025-05-02
News
Relevance up to 03:00 2025-05-05 UTC--4
US market: modest but positive move
13:38 2025-05-02
Stock Markets
Relevance up to 01:00 UTC--4
US stock market on May 2: S&P 500 and Nasdaq still battling volatility
13:33 2025-05-02
Stock Markets
Can't speak right now?
Ask your question in the chat.
Widget callback
Callback widget
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.