Fed's Preferred Inflation Gauge: Core PCE Rose 3.3% Year-on-Year in July

The annual increase in core PCE at 3.3% strengthens the likelihood that the Federal Reserve will postpone or slow down its interest rate cuts. This scenario could support the appreciation of the U.S. dollar against other currencies. Technical indicators also align with this outlook; the RSI stands at 59.5 in bullish territory, and the MACD is positive above its signal line. The price is trading above both the SMA20 and SMA50, indicating a short-term upward trend. However, given uncertainty over whether the market has fully priced in the inflation data, the upside may remain limited.

Core PCE came in at 3.3%, above expectations, indicating that inflation remains sticky. This could increase the likelihood of the Fed delaying or pausing interest rate cuts, thereby dampening risk appetite. With the index's RSI approaching overbought territory at 63, profit-taking may occur in the short term. However, given the current uptrend and strong momentum, any decline is expected to be limited.

The annual increase of 3.3% in core PCE indicates persistent inflationary pressure above the Fed's target, which could dampen expectations for interest rate cuts. Technically, the price remains below the 50-day moving average (7694), while the MACD is in negative territory and below the signal line, suggesting weak short-term momentum. The RSI at 50 does not provide a clear directional signal, but selling pressure may increase following the inflation data. Therefore, the index faces a risk of pulling back toward the 20-day average (7667) within 1-3 days. However, it should be noted that if the data aligns with market expectations, the decline could be limited.

The annual increase in core PCE of 3.3% indicates that the Fed's battle against inflation is not yet complete, which could dampen expectations for interest rate cuts. Technically, the NDX is trading below its 50-day moving average, and the MACD is in negative territory, supporting short-term pressure. Although the RSI is at a neutral level, the inflation data may reduce risk appetite. However, the price holding above the 20-day average suggests that any decline could be limited. Therefore, a slight pullback can be expected in the short term.