Today, we got some key economic data out of the US. Let's take a look at these data points and the reaction in the USD index. US CPI m/m (June): 0.3%Forecast: 0.3%Previous: 0.4%Core CPI m/m (June): 0.2%Forecast: 0.2%Previous: 0.1%Prelim UM Consumer Sentiment (July): 93.3Forecast: 96.0Previous: 96.1 (revised from 94.6)Housing Starts (June): 1.17MForecast: 1.10MPrevious: 1.07M (Revised from 1.04M) The inflation data is not bad, meaning at this rate, the FOMC does have room to raise rates. The target rate is 2.0% on the year, and it was 0.3% on the month. You do the math. In terms of the trend, we saw positive inflation 5 months in a row. Consumer Sentiment notched down a little in July. The trend has been sliding a bit since the index hit 98.2 at the end of 2014. Still at 93.3, the index is at multi-year highs, so unless we start seeing the index start holding under 90, the slight pullback should not be a concern. Housing starts has been on th rise in 2015, and since 2011 in general. The 1.17M a year reading in June is the highest since 2008. While the market is monitoring this data point as much as it does wage inflation for example, this housing trend is positive and points to room for the FOMC to raise rates by 2016 - a USD-positive factor. USD Index 1H Chart 7/17(click to enlarge)The 1H chart shows that the market has been bullish all week with price holding above the 200-, 100-, and 50-hour simple moving averages (SMAs). The climb has stalled a bit the past couple of sessions, but appears to have more life again after the US data. The consumer sentiment data was not impressive and might have caused a slight stall around the 97.80 area. but this market is bullish unless price falls below 97.00. USDX Daily Chart 7/17(click to enlarge)The daily chart shows a bullish market that has been consolidating for the first half of the year but appears to be on a bullish continuation run since the end of June. If price does hold above 97.00 next week, we should be looking for a rally towards 100.40 soon, before Q4 - that is unless the FOMC shifts away from its hawkish tone.