US CPI today could show we are past peak inflation

With the FTSE100 passing the 7940 level then then next level of note is at 7990 - now so close to the 8000! As you know we have the US CPI news out today at 1330 with both the core and YoY expected to fall slightly. If so then it adds further weight to the fact that we may well have seen peak inflation across the board around Christmas time. 

The ASX200 had a bit of a bearish start (well it is Tuesday!?) and we may well do the same. 7960 was also flagging as resistance yesterday above the 7940 level and we tested that after hours and that area did cap the rise. Likewise 4140 on the S&P500 at the end of the day. 

If we do get an initial drop then I am looking at the 7910 level once again, and then the 7885 area below that. We have a few supports coming into play  though with the 2h showing at 7924 and 7913, while the 30m chart has S1 and the 200em at the 7900 level. 

 Below 7883 where we had the key fib and the bears may well want to capitalise while they can and aim for S2 at 7833 but whether they could get there remains to be seen. It's a brave buyer that loads up FTSE100 at near enough 8000 but having said that it's holding up here remarkably well. 

If CPI does show a drop it could be argued that rates wont need to keep rising so fast, and that in turn will likely see a climb on the markets. Or will we get the good news is bad scenario play out again!?

On the upside, the bulls will be looking to cement a rise above the 7960 level to target the 7990 as mentioned. With 8000 within touching distance it would be churlish to not at least try to test it so a rise towards R2 at 8030 would be quite likely, if they do break the 7990 level. On the other hand it could be argued that it's too obvious and a drop from just shy of the round number could well play out. 

So, basically I am thinking that we may well get a dip and rise today. Some profit taking ahead of the news after the run higher from 7700 would make sense...

Good luck today.