US August Inflation Comes in at 3.4%, in Line with Expectations

Although US inflation coming in line with expectations reduces uncertainty in the market, the reaction of the NDX may remain limited. Technical indicators are giving mixed signals: RSI is in neutral territory at 51.6, MACD is negative and below the signal line, and the price is trading very close to the SMA20 and SMA50. This outlook increases the likelihood of a sideways trend in the short term. If the inflation data does not change Fed rate expectations, the index can be expected to remain within its current range. Nevertheless, volatility may increase after the data, so it is difficult to indicate a definite direction.

US inflation coming in line with expectations may have a limited effect on the DXY; while uncertainty has eased, additional confirmation is needed for direction. Technical indicators are mixed: price is slightly below the 20-day SMA and above the 50-day SMA; RSI at 45.6 is in neutral territory and below the MACD signal line. This picture increases the likelihood of a sideways-volatile course in the short term. Since the inflation data did not change Fed rate expectations, a clear breakout signal for the dollar index is weak. In the 1-3 day view, resistance around 99.00 and support around 98.90 can be monitored.

US August inflation coming in at 3.4%, in line with expectations, may have a limited effect on the market. The SPX closed the last 24 hours down 0.64% at 7,665.86 and is trading just below its 50-day moving average (7,669.85). The RSI is at 55.85, in neutral territory, and the MACD is negative but hovering near its signal line. Although the inflation data meeting expectations slightly reduces uncertainty about Fed policy, it is not a strong catalyst for direction in the short term. Therefore, I expect a neutral trend in the 1-3 day outlook.