PCE In FocusLooking ahead to today’s US session, the key data focus will be the release of US core PCE for January. Given the hawkish shift from the Fed and the run of strong data we’ve seen recently, the market is poised for another strong reading today. With USD currently trading higher on safe haven inflows, a downside surprise today would likely do little to dent the current bullish momentum. However, an upside beat would certainly add further fuel to the fire. The market is looking for an unchanged reading of 0.5%, giving plenty of room for an upside surprise today to help lift USD further.Where to Trade US Core PCE?USDJPYWhile JPY is drawing plenty of safe haven support given the current geo-political backdrop, in terms of interest rate expectations, market sentiment still favours a stronger USD. With this in mind, an upside beat on today’s data might help lift USDJPY with 116.07 the level to watch. A break here will target the 117.02 level initially. On the other hand, if data does surprise to the downside today, depending on the scale of the miss, we could see a dip below the 114.70 support and bull channel low.
Source: Tickmill
