On Monday (Oct 31), the sub-session, rose sharply, temporarily traded at 110.88, or 0.18%.
Julia Wang, global market strategist at jpmorgan Chase & Co. in New York, said she expects the turn to come as early as the fourth quarter of next year, judging by the direction of U.S. inflation and the labor market.
Inflation is still pretty strong, and while some leading indicators of inflation have moved lower, it will take at least a few months for core PCE to show up.
And inflation will not be truly sustainably lower until the end of next year;
As for the U.S. labor market, Wang said he expects to see signs of weakness, probably around the middle of next year, but it will take about 12 months before there is a substantial slowdown.
So it is likely to be late next year before conditions in the Labour market align with the scenarios implied by the Fed‘s inflation target.
As a result, Wang said the inflation trading mechanism will continue in the coming months.
Short-term resistance in the USD index is at 111.10–111.15, while short-term important resistance is at 111.45–111.50.
