US Producer Inflation Accelerated in August

The acceleration of US producer inflation in August strengthens expectations that the Fed may delay interest rate cuts or adopt a more cautious stance, potentially supporting the DXY. Technical indicators already point to strong momentum: RSI at 73 in overbought territory, price above the 20- and 50-day moving averages, and MACD above the signal line. However, overbought conditions may create limited upside potential or profit-taking risk in the short term. The impact of the news may be limited as the market is also pricing in other data on Fed policy. Nevertheless, persistent inflation pressure could support an upward trend in DXY.

The acceleration of US producer inflation in August could dampen risk appetite amid concerns that the Fed might delay interest rate cuts. The S&P 500 has already fallen 1.5% in 24 hours, with its RSI nearing oversold territory at 35 and MACD trending below its signal line in negative territory. The price is below its 20- and 50-day moving averages, confirming a weak short-term outlook. The news could reinforce the current downtrend, but oversold conditions also raise the possibility of a limited rebound. Nevertheless, I assess that downside risk is more dominant in the 1-3 day horizon.