US July Inflation Comes in Below Expectations

Inflation coming in below expectations could reduce the likelihood of the Fed raising interest rates and put pressure on the dollar. The DXY's RSI at 34.3 is near oversold territory, suggesting that the decline may continue in the short term but could be limited. The price is trading below the SMA20 and SMA50, confirming current weakness. The MACD remains below the signal line, with momentum on the negative side. However, the low RSI reading also brings the possibility of a corrective bounce, so the pace of downward movement may remain constrained.

Inflation coming in below expectations could increase the likelihood of the Fed cutting interest rates and support risk appetite. Technically, the RSI is in neutral territory at 49, and while the MACD is below the signal line, the price is slightly below the SMA20 and above the SMA50. In the short term, this news could be a positive catalyst, but an upward move is needed for the price to reclaim the SMA20. Market reaction may remain limited, so confidence is moderate.

Inflation coming in below expectations strengthens the likelihood that the Fed may adopt a more dovish stance on interest rate hikes. This could serve as a positive catalyst for the NDX index, which is heavily weighted toward growth-oriented technology stocks. Technically, while the RSI sits just below the 50 level and MACD remains below its signal line, the price is holding above the SMA20 and SMA50. In the short term, this news flow could support an upward move in the index, but given the weakness in current indicators, a limited rise rather than a strong rally can be expected.