US inflation slows in January 2026, its lowest since May 2025

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U.S. annual inflation rate slowed in January, 2026 to 2.4 percent year-over-year from 2.7 percent the month prior, marking its lowest level since May, 2025 as energy prices push lower. Also driving the headline figure were lower gasoline prices and fuel. Meanwhile, monthly CPI rose a mere 0.2 percent, marking the slowest monthly pace in recent months.

The figures

Market forecasts

SPX weekly chart

Taking a look at the S&P 500 (SPX) weekly chart, the index has stalled at the 78.6 percent Fibonacci extension on the recent upswing. With bearish RSI deepening, there is potential for a short-term correction; however, we do not rule out another push higher towards equal legs in the 7300 area to squeeze out early shorts before a larger correction in the medium to long term.

In the forex market, EUR/USD is at the crossroads, trading at key weekly trend line resistance that was formed in 2018. This junction not only represents trend line resistance, but also coinsides with equal legs from a Elliott wave theory perspective. While price action stays below this level, market participants should not rule out a pullback towards 1.12. Should occur, options traders will view this as a range bound oppotunity of with swing high bias as the overall greenback theme medium to long term remains bearish.

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Sigmanomics

Sigmanomics is a financial intelligence platform that delivers expert insights, data-driven analysis, and real-time trading signals across global markets.

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