TA Tuesday: Economic data release before a clear and calm year end

This week is marked by economic data; we will then see a clean and calm year end.

This week is shaping up to be a big one for economic data, with the release of the US Consumer Price Index (CPI), the Federal Reserve interest rate decision, and various other data on retail sales, jobless claims, and manufacturing.

The only data that could potentially move markets is the CPI.

While the price of Goods is deflating, Services are still holding up relatively well. Should we have a CPI YoY at 7.3%, we would then expect a soft 50 bps hike; any surprises to the upside, (i.e. 7.4% – 7.5%) would skew the market to the downside as the Fed might want to push the rate towards 5%+.

After this week, the year-end is expected to be clear and calm.

On the cryptocurrency side, bitcoin is holding steady at around $17,000, and the realised volatility has dropped back to pre-FTX levels. The 30-day realised volatility is currently at 30%. VRP are still wide and lagging, with 30-day at-the-money implied volatility trading at a premium of 26%. We may see some volatility around the CPI and the Fed rate decision, but otherwise there are no major events expected in the near future.

Looking at the chart, the relative strength index is neutral, with support at $15,500 and resistance at $18,500.

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