Important events today:

04:00 UTC – USA: ISM Manufacturing PMI.

Average U.S. gas prices are at an all-time high of $1 per liter, up from $0.7 a year earlier, according to the AAA Automobile Club. Rising fuel prices may lead to higher inflation and, consequently, tightening of the Fed’s monetary policy. If last month there were expectations in the markets that the Fed could calm down by autumn, now such an outcome is unlikely. Gasoline has historically been an important component of inflation, and as long as its annual dynamics does not stop growing, a slowdown in inflation should not be expected.

The current situation in the world more and more reminds me of the events of 2007-2008, when there was also a strong increase in inflation due to a sharp rise in the price of gasoline, which eventually led to the global economic crisis. If this dynamic repeats this time, then we are in for a continued strengthening of the dollar, as the US currency is in high demand as the crisis approaches.

Recommendations: Selling 1.2620/1.2645 with TP 1.2550.