Rules of Fundamentals changed? Case study: EURUSD

[peterma]

I just had a like reminder of a post back in Jan 2018.

The number one rule of FA is context - check GBP/USD (cable) since Jan last year:

Economic Calendar-Consumer Price Index

As forexgump says CPI is usually perceived as a leading indicator of interest rates, Central Banks over the years have used rates in a response to CPI - thus as inflation has been on a downward trajectory then so too interest rates. When there was recent talk (back a couple of years) of deflation so also there was talk of minus interest rates. CPI is now on the up, so too rates, but you have hit the nail on the head with UK numbers. Context is king, CPI is rising not because of increased wage…