Summary of US Dollar Analysis Post CPI Data
On October 14, 2026, Greg Michalowski provided a technical analysis of the US dollar's performance following the release of higher-than-expected Consumer Price Index (CPI) data. The analysis focused on major currency pairs including EURUSD, USDJPY, GBPUSD, USDCHF, and USDCAD, highlighting the implications of the CPI data on these currencies.
Key Insights from the CPI Data
The US CPI data indicated a significant increase, leading to a decline in stock prices, a rise in Treasury yields, and an appreciation of the US dollar. The immediate concern was the surge in energy prices, with gasoline prices jumping 9.1% in September, following a 3.9% increase in August. Fuel oil also saw a substantial rise of 15.3% after a 10.1% increase in the previous month.
Inflation Trends
Services inflation showed a steady increase, with services excluding energy rising from +0.2% in July to +0.4% in September. This trend raised concerns about broader inflationary pressures beyond volatile energy prices. Shelter costs also increased, with monthly changes moving from +0.1% in June and July to +0.4% in September, indicating a potential reversal in the previously improving trend.
Transportation and Core Goods
Transportation services experienced a reversal in price trends, with increases noted over the last three months. Higher energy prices are impacting the costs of goods that require transportation. Core goods, particularly used vehicles, showed less relief, with recent price increases despite being cheaper than a year ago.
Market Reactions
Following the CPI release, US Treasury yields rose sharply, particularly at the shorter end of the curve, as traders anticipated two rate hikes by January. The 2-year yield increased to 4.9266%, while the 10-year yield rose to 5.3123%. This led to a flattening of the yield curve, with the spread between the 2-year and 10-year yields narrowing.
Stock Market Impact
The stock market reacted negatively, with the NASDAQ composite down by 0.60% and the NASDAQ 100 index down by 0.75%. However, the Dow industrial average showed a slight increase of 0.14%, contrasting with the overall downward trend.
Technical Analysis of Major Currency Pairs
In the video analysis, Michalowski examined the technical levels for the following currency pairs against the US dollar:
- EURUSD
- USDJPY
- GBPUSD
- USDCHF
- USDCAD
He discussed the bias, risks, and targets for each pair, emphasizing the importance of understanding these levels in light of the recent inflation data and its impact on trading strategies.
Conclusion
The analysis underscores the significant influence of inflation data on market dynamics, particularly regarding the US dollar and its major currency pairs. Traders are advised to remain vigilant and prepared for potential market movements as inflationary pressures persist.