EUR/USD analysis: US CPI takes center stage

Valeria Bednarik FXStreet

EUR/USD Current price: 1.2362

US CPI expected at 1.9% YoY for January.
EUR/USD nearing the 1.2400 figure on easing equities, yields.

Currencies were once again dependant on equities and yields for direction, although the greenback was also dumped ahead of US inflation release this Wednesday. The EUR/USD pair surged to 1.2370 and holds nearby by the end of the US session, having steadily advance after breaking above the 1.2300 figure. There were no macroeconomic releases to fuel the ongoing rally and once again, it was all about equities and yields, both retreating in the US session and leading to USD loses.

Moving-market data will start to flow this Wednesday, starting with Germany that will release January inflation figures and preliminary Q4 GDP. Inflation is seen unchanged from the previous readings, while the economy is expected to have grown 0.6% in the last quarter of 2017 after growing 0.8% in the previous one. The EU will also release its prelim Q4 GPD, expected at 0.6%, while the star of the day will be US inflation. Despite not being Fed's favorite measure, the world gyrates around inflation these days, and any divergence from market's expectations is probably going to trigger some interesting moves. YoY CPI is expected to be of 1.9% from the previous 2.1%. The US will also release January Retail Sales, seen posting a modest monthly advance.

From a technical point of view, the recovery is quite significant, as the pair bottomed late last week around the 50% retracement on the January rally, and now not only surpassed the 38.2% but is close to the last Fibonacci barrier at 1.2395. In the 4 hours chart, technical indicators hold within positive territory, but the upward strength is easing. The pair is well above its 20 and 200 SMAs but is finding a hard time to surpass the 100 SMA, a few pips above the current level. Anyway, the relevant resistance is the 1.2400 area, the one the pair needs to surpass to maintain the positive bias.

Support levels: 1.2300 1.2260 1.2225

Resistance levels: 1.2400 1.2440 1.2480

View Live Chart for the EUR/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD extends its optimism past 1.1900

EUR/USD retains a firm underlying bid, surpassing the 1.1900 mark as the NA session draws to a close on Monday. The pair’s persistent uptrend comes as the US Dollar remains on the defensive, with traders staying cautious ahead of upcoming US NFP prints and CPI data.

GBP/USD hits three-day peaks, targets 1.3700

GBP/USD is clocking decent gains at the start of the week, advancing to three-day highs near 1.3670 and building on Friday’s solid performance. The better tone in the British Pound comes on the back of the intense sekk-off in the Greenback and despite re-emerging signs of a fresh government crisis in the UK.

Gold picks up pace, retargets $5,100

Gold gathers fresh steam, challenging daily highs en route to the $5,100 mark per troy ounce in the latter part of Monday’s session. The precious metal finds support from fresh signs of continued buying by the PBoC, while expectations that the Fed could lean more dovish also collaborate with the uptick.

XRP struggles around $1.40 despite institutional inflows

Ripple (XRP) is extending its intraday decline to around $1.40 at the time of writing on Monday amid growing pressure from the retail market and risk-off sentiment that continues to keep investors on the sidelines.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.