Bitcoin Braces for First Inflation Test Since US Shutdown

💡 DMK Insight

The upcoming CPI report is crucial, but traders should keep their eyes peeled for how tariff concerns and labor data will shape market sentiment. With inflation data often viewed through the lens of the Fed’s interest rate trajectory, any surprises could lead to volatility, especially in equities and forex markets. If inflation comes in hotter than expected, it could reignite fears of aggressive rate hikes, pressuring risk assets. Conversely, a cooler print might provide a temporary relief rally, but the underlying issues of tariffs and labor market tightness could overshadow any positive sentiment. For forex traders, the USD’s strength hinges on these inflation figures, particularly against major pairs like EUR/USD and GBP/USD. Watch for key resistance levels around 1.10 for EUR/USD and 1.25 for GBP/USD; breaks above these could signal a shift in momentum. Additionally, keep an eye on the VIX index for spikes in volatility, which often precede significant market moves. The real story is in the broader economic context—if labor data continues to show weakness, it could signal a slowdown that might not be fully priced in yet. In short, while the CPI report is important, the interplay of tariffs and labor data will likely dictate market direction more significantly in the near term.