This week's macroeconomic data: US CPI inflation is expected to rise moderately, and demand for Bitcoin (BTC) Spot ETF may surge.

Bitcoin (BTC) has once again set a new historical record, reaching $119,459 over the weekend. Analysts predict that the U.S. June consumer price index (CPI) to be released this week will rise moderately. As trade tensions escalate, this will lead to a surge in demand for BlackRock's Bitcoin Spot ETF (IBIT).

U.S. inflation is expected to rise moderately

FPMarkets Chief Market Analyst Aaron Hill stated that economists expect U.S. inflation pressure to rise moderately in June, with the report set to be released on Tuesday at 12:30 PM GMT. The current market median estimate is an overall inflation year-on-year increase of 2.6%, up from 2.4% in May (with an estimated range between 2.7% and 2.4%). Excluding food and energy items, core inflation is expected to rise by 3.0% year-on-year, up from 2.8% in May. A quarterly increase of 0.3% is forecasted, with both overall and core inflation expected to rise by 0.1%.

However, despite the possibility that June data may show some tariff impacts, particularly in tariff-sensitive goods such as clothing, it is unlikely to be enough to prompt the Federal Reserve (Fed) to take action this month. Although there were "several" committee members who were open to the idea of a rate cut at the next meeting according to the minutes from the Fed's meeting on June 17-18, the majority of committee members remain cautious.

The recent minutes of the Federal Reserve meeting are quite interesting, as they highlight the divergences that emerged in the last meeting: one camp is focused on a potential one-time price rise, while the other is more concerned about the long-term effects of inflation. Of course, the former is more open to rate cuts, while the latter hopes to maintain interest rates unchanged.

As of the writing of this article, the market expects a 93% probability that the Federal Reserve will maintain the target range of 4.25%-4.50% at the end of this month, with a rate cut of 18 basis points in September, 32 basis points in October, and a total of 51 basis points by the end of the year. Therefore, it is expected that there will be two rate cuts this year, which is consistent with the Fed's latest forecast.

If June data shows inflation above expectations, exceeding the anticipated upper limit, it may trigger a sell-off of U.S. Treasuries this week and increase demand for the U.S. dollar (USD). Due to excessive downside in COT (Commitment of Traders) positions for the dollar, traders may cover some of their short positions, which could also strengthen dollar buying. Conversely, if this week's data shows inflation below expectations, it may trigger a decline in the dollar.

Macroeconomic data worth paying attention to this week

July 15:

Canada's June CPI inflation rate (GMT 12:30 PM)

Preliminary estimates show that the overall CPI inflation rate rose by 1.9% in June, up from 1.7% in May. Previously, the Bank of Canada maintained the overnight rate at 2.75%, and the market currently anticipates another 25 basis point rate cut this year.

July 16:

UK June CPI Inflation Rate (GMT 6:00 AM)

Preliminary forecasts indicate that the inflation rate in June has risen to 3.5% from 3.4% in May. Previously, the Bank of England decided to raise interest rates with a voting result of 6 to 3, which means there may be a 25 basis point cut in August.

U.S. Producer Price Index (PPI) inflation rate for June (12:30 PM GMT)

Preliminary estimates show that after a rise of 2.6% in May, the U.S. producer price index has fallen to 2.5% in June.

July 17

UK May Employment Data (6:00 AM GMT)

The unemployment rate is expected to remain unchanged at 4.6% in May, and it is anticipated that wage growth (including regular wages and bonuses) will slow down over the three months leading up to May.

U.S. June Retail Sales Data (12:30 PM GMT)

As a key indicator of consumer spending, the U.S. retail sales data for June will be closely watched, with an expected growth of 0.1% in June after a decline of 0.9% in May.

Bitcoin Price Outlook: Key Drivers

FXEmpire analyst James Hyerczyk stated that several macro and market factors will influence BTC's near-term outlook, including: trade developments, legislative updates (votes on the "GENIUS Act," "CLARITY Act," and "Anti-CBDC Surveillance Act"), upcoming US inflation data and Federal Reserve monetary policy guidance, and the liquidity of Bitcoin Spot ETF in the US.

Bitcoin Price Scenario:

Bullish scenario: Easing trade tensions, the Federal Reserve signaling dovish moves, passage of cryptocurrency legislation, softening U.S. inflation, and ETF inflows could drive Bitcoin prices to $120,000.

Bearish scenario: Escalating trade tensions, hawkish remarks from the Federal Reserve, legislative hurdles, increasing inflation in the United States, or outflows of funds from ETFs could drive Bitcoin down towards $100,000.

Bitcoin Technical Analysis

James stated that the Bitcoin trading price is above its 50-day and 200-day exponential moving averages (EMA), confirming a bullish signal.

Target for upward movement: Breaking through the historical high of 118,302 USD set on July 11 may lead bulls to aim for 120,000 USD. A sustained breakthrough of 120,000 USD could pave the way towards 130,000 USD.

Downward Target: A drop below $110,000 may expose the 50-day EMA and potentially make the key support level of $100,000 come into play.

The 14-day Relative Strength Index (RSI) is 71.81, indicating that Bitcoin is in the overbought region (RSI > 70). After reaching a historical high of $118,302, selling pressure may intensify.

(Source: Trading View)