The US inflation rate roared to a four-year high of 9.1% last month. But analysts also pointed to the rising strength of the dollar, which is currently trading in a strong weekly supply zone. In the short term, this could lead to dollar weakness if European CPI figures come in higher than expected next week.
Bitcoin itself has rejected the daily supply zone at $22-23.2K. The result of the US inflation rate has not pushed Bitcoin below the previous lows around $18.6K, suggesting that a retest of the supply zone at $22-23.2K is still possible. The overall crypto market capitalization shows the same story as Bitcoin. The more often a certain price level is tested, the weaker that level becomes. Will we see relief at $30k in the coming months?
Next week, Europe is back on the agenda. On Tuesday, the consumer price index (CPI) of the euro zone will be announced, with little difference expected from the previous week.
On Wednesday, the consumer price index for the United Kingdom will be published, which is forecasted to be higher than the previous month, reinforcing pressure to contain inflation.
The euro has been losing ground against the dollar since the beginning of the year, when it was hovering around $1.13, a long way from its peak of nearly $1.60 in 2008. Since the start of March, record gas prices have pushed food and energy prices around the world. So, amid rising uncertainty, the European CPI data could be higher than expected. On Thursday, the ECB will hold a press conference to discuss monetary policy and the interest rate decision. The ECB is under pressure to curb inflation faster, making interest rate hikes more likely.