Home Analysis US inflation remains well above the Fed’s target. The disinflationary momentum continues.

US inflation remains well above the Fed’s target. The disinflationary momentum continues.

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  • US inflation continues to be well above Fed target
  • Disinflation continues
  • US Dollar Buyers Likely to Appear as More Rate Hikes Likely

Last week, the US Federal Reserve signaled its intention to pause the rate hike cycle. The commission said it would continue to rely on data.

Well, the data show that the Fed is likely to continue raising rates. Yesterday, the US Inflation Report for April was released.

Annualized inflation continues to decline, but remains well above the Fed’s target. Combined with the resilience of the job market, it gives the Fed the go-ahead to tighten further.

Bitcoin has followed a similar path as fiat currency. The US dollar has risen and is on an upward trend as evidenced by the AUD/USD exchange rate failing to stay above 0.68 and is currently down about 100 pips points.

However, bearishness seems to be more emphasized when it comes to Bitcoin. The head and shoulders pattern points to a fall to $24,000 if the US dollar continues its momentum.

Bitcoin charts by TradingView

Technical Analysis Supports Drop to $24,000

Bitcoin fell at 30,000 after a strong rally in 2023. A bearish technical pattern of head and shoulders can be seen.

The movement in the measured value shown in blue shows a drop to $24,000, a region of historical resistance. Therefore, support should be provided during the first retest according to compatibility principles.

Bitcoin followed the US dollar, and events in traditional financial markets influenced Bitcoin’s movements. The downside is the path of least resistance for Bitcoin as yesterday’s inflation report indicated that the Fed is likely to continue raising rates.

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