Current data suggests that inflation has been in our everyday lives for several months. And today’s Producer Price Index data was pretty ugly.
But Could inflation Be Peaking?
Today’s chart 2-pack offers a glimpse of why inflation could subside over the near term.
Here we look at the “monthly” chart of the US dollar and euro currencies. It’s pretty easy to see the rising trend channel for the US dollar and the falling trend channel for the euro. Both currencies have also formed a wedge pattern, with the dollar testing resistance and the euro testing support.
Inflation will likely subside if the US dollar breaks out to the upside (euro break to the downside). However, if the dollar turns lower and breaks its own support, then inflation could take off.
It seems like a pretty important pennant pattern to watch. Stay tuned!
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