The next report i'm looking at is the Core PCE on Friday. As i'm sure you know, this is one of the Fed's most important indicators of inflation. The consensus is for an increase from a .1% rate to a .2% rate ($+).
What's interesting here, is that the $ is presently at a level (2700 or so) that indicates this info is probably close to already having been bought into, if the report comes out about on consensus. I think the best scenario for this report is if the $ goes down between today and the Friday morning London open. If the EUR does go to the high 2700's or better, you may see a large EUR drop after the Friday morning London open, as traders buy (or in this case re-buy) into the consensus $+ numbers for this report.
To put it another way, if the numbers do come out consensus or a bit higher and the EUR is sitting at 2650-2700 at the time of the report, there probably won't be too much room for the $ to strengthen further. Just the opposite is true if the EUR is sitting in the high 2700's (or even the low 2800's) and the report comes out this way; then there will be room for the $ to strengthen. The thing to also be aware of, is where the EUR is sitting when London opens Friday morning. If it is in the high 2700's, you may see traders buying into the report ($ strengthening) during that London session.
Of course, the number might come out dollar negative. If we see the number at like 0 or even more negative, he opposite scenario is then in effect; if the dollar is sitting where it is now or better, obviously there would be a large up spike in the EUR as the EUR would be "undersold" for a $- report. And, if the EUR is in the upper 2700's-low 2800's with a $- reading, there will be less room for the EUR to strengthen further.
What's interesting here, is that the $ is presently at a level (2700 or so) that indicates this info is probably close to already having been bought into, if the report comes out about on consensus. I think the best scenario for this report is if the $ goes down between today and the Friday morning London open. If the EUR does go to the high 2700's or better, you may see a large EUR drop after the Friday morning London open, as traders buy (or in this case re-buy) into the consensus $+ numbers for this report.
To put it another way, if the numbers do come out consensus or a bit higher and the EUR is sitting at 2650-2700 at the time of the report, there probably won't be too much room for the $ to strengthen further. Just the opposite is true if the EUR is sitting in the high 2700's (or even the low 2800's) and the report comes out this way; then there will be room for the $ to strengthen. The thing to also be aware of, is where the EUR is sitting when London opens Friday morning. If it is in the high 2700's, you may see traders buying into the report ($ strengthening) during that London session.
Of course, the number might come out dollar negative. If we see the number at like 0 or even more negative, he opposite scenario is then in effect; if the dollar is sitting where it is now or better, obviously there would be a large up spike in the EUR as the EUR would be "undersold" for a $- report. And, if the EUR is in the upper 2700's-low 2800's with a $- reading, there will be less room for the EUR to strengthen further.