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Inflation data did not help the dollar

January 13, 2022

EUR/USD: The euro strengthened on Wednesday after the latest U.S. inflation data showed price pressures surging but within expectations, apparently suggesting the Federal Reserve will not have to hike interest rates too aggressively. Data showed the U.S. consumer price index leaping a whopping 7% in the 12 months through December, the biggest annual increase since June 1982. But it was within forecasts, which appeared to reassure investors. The dollar hit a two-year low on the inflation report, with the dollar index falling 0.6% to 95 against a basket of six major currencies. Immediate resistance can be seen at 1.1450. A break to the upside can trigger growth towards 1.15.

BUY STOP 1.1450/TP 1.15/SL 1.1430


USD/CAD: The Canadian dollar strengthened to its highest level in nearly two months against the U.S. dollar on Wednesday as oil prices rose and investors took in stride data showing U.S. inflation rose strongly in December. The loonie was trading 0.4% higher at 1.2500 to the greenback, after touching its strongest intraday level since Nov. 16 at 1.2490. The price of oil, one of Canada’s major exports, added to recent gains on tight supply and easing concerns about the potential hit to demand from the Omicron coronavirus variant. U.S. crude prices were up nearly 1% at $82 a barrel. Immediate support is located at 1.25. A break below could take the pair towards 1.2450.

SELL STOP 1.25/TP 1.2450/SL 1.2520


GBP/USD: Sterling steadied on Wednesday within striking distance to its recent highs versus the dollar and the euro, as investors focused on possible rate increases from the Bank of England. The pound has strengthened recently as investors ramped up expectations of further rate rises while Britain’s focus on rolling out booster vaccinations rather than returning to coronavirus lockdown measures boosted risk sentiment. If the sentiment does not change in the coming days, the pound will face new local highs. Immediate resistance can be seen at 1.3720. A breakout up can trigger growth towards 1.3770.

BUY STOP 1.3720/TP 1.3770/SL 1.37