The UK CPI numbers were confirmed higher than expected by the analyst consensus. The 0.1% (0.7% vs. 0.6% predicted) was greeted by traders with a small rally. But all in all trading in Cable has been subdued this morning. Earlier GBPUSD ran about 200 pips after it broke above 1.3760. We said earlier this breakout would make such a move likely. The pair has now lost some momentum near the upper end of the bull channel it is trading in. This loss of momentum has been caused by USD strength that was clearly visible across the board yesterday. EURUSD traded also lower together with commodity currencies. Treasury yields surging to the highest level since February 2020 sent the price of gold down to the 1785 support. At the time of writing gold has traded slightly below the support level. US retail sales together with the FOMC meeting minutes will be today’s main risk events for anything and everything trading against the USD, including EUR and Gold. See our economic calendar for more information. By reading further you agree with our disclaimer at the bottom of this page and acknowledge that we do not provide investment advice.

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The Doji in the daily chart above shows how traders weren’t able to move the prices higher for a one full day. Momentum loss signal like this near the channel high indicates that the market is taking a breather and could be vulnerable to further corrective moves lower. The 1.3866 is a key support level that needs to hold in order for the market to rally higher. If this support breaks the next key support area is at 1.3752 – 1.3758 where we have the 20-day SMA, 23.6% retracement level and a high from January 27th. Open a VIP Black account with us. There are no per trade execution or monthly fees on our VIP Black accounts.

The S&P 500 is trending higher in the daily timeframe but retraced back some yesterday. The index CFD seems to be finding support at 50-period SMA in 4h timeframe. A push above 3936.40 opens up the way to the recent highs at 3963.75. Should today’s low at 3935 give in then the next technically relevant zone can be found at 3884 – 3894 where we have the 23.6% retracement level and the low from Wednesday last week. Open a VIP Black account with us. There are no per trade execution or monthly fees on our VIP Black accounts.

Gold is trading slightly above the 1785 support after briefly moving below the support level. While gold is trending lower in a downward pointing channel it is also fairly close to the lower end of the channel. The next significant support level can be found at 1764.26. The 20-day SMA and the channel top are currently in 1795 – 1850 range.

The Canadian CPI release is scheduled for today at 1 pm GMT and could obviously move USDCAD should there be a strong deviation from expectations. Analyst consensus predicts the headline inflation has increased by 0.5% (previous -0.2%). The last time we analysed USDCAD we suggested it would be likely to rally to 1.2763 resistance. This is what then happened and heavy buying came in at exactly this level taking the pair down to 1.2609 before buyers stepped in again. The key support and resistance levels for the pair are 1.2588 and 1.2881.

Recent macroeconomic data releases

  • Canadian Employment Change -212.8K, -43.5K expected
  • Canadian Unemployment Rate 9.4%, 8.9% expected
  • US Average Hourly Earnings 0.2%, 0.3% expected
  • US Non-Farm Employment Change 49K, 85K expected
  • US Unemployment Rate 6.3%, 6.7% expected
  • Canadian Ivey PMI 48.4, 49.5 expected
  • New Zealand Inflation Expectations 1.89%, 1.59% expected
  • US CPI 0.3%, 0.3% expected
  • US Core CPI 0.0%, 0.2% expected
  • US Crude Oil Inventories -6.6M, -0.9M expected
  • US Unemployment Claims 793K, 755K expected
  • UK Preliminary GDP 1.0%, 0.5% expected

Important macroeconomic data releases today

  • RBA Assistant Governor Kent’s Speech
  • UK CPI 0.7%, 0.6% expected
  • Canadian CPI 0.5% expected
  • US Core Retail Sales 1.1% expected
  • US Retail Sales 1.1% expected
  • FOMC Meeting Minutes

You may access the times and dates in the economic calendar here.

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Trade Safe!

Janne Muta
Chief Market Analyst
TIOmarkets.com

TIOmarkets offers exclusively consultancy-free service. The views expressed in this blog are our opinions only and made available purely for educational and marketing purposes and do NOT constitute advice or investment recommendation (and should not be considered as such) and do not in any way constitute an invitation to acquire any financial instrument or product. TIOmarkets and it’s affiliates and consultants are not liable for any damages that may be caused by individual comments or statements by TIOmarkets analysis and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his/her investment decisions.

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