EUR/USD, GBP/USD and AUD/USD continue to grind higher
EUR/USD, GBP/USD and AUD/USD grind higher, with traders reacting to the latest UK inflation figure.
EUR/USD pushing higher in bullish continuation move
EUR/USD looks set to continue its recent resurgence, with the pair seeking to follow up on the four-month high established yesterday.
The recent consolidation has seen the pair attempt to resolve the question of whether we will post a downside retracement of note or simply push higher once again. The failure to break below the $1.0271 signified the latter, with prices pushing upwards once again today.
As such, further gains seem likely, with a move back below the $1.0271 required to signal a potential short-term reversal of the recent spike.
GBP/USD comes into focus after surge in UK CPI
GBP/USD has similarly been gaining ground in the wake of the risk-on move sparked by Thursday’s US consumer price index (CPI) decline. However, today has seen inflation come back into play today, with the latest UK CPI figure of 11.15% signaling a huge divergence coming into play between the UK and US inflation figures.
Quite whether this will create any divergence in monetary policy remains to be seen, with market pricing in a higher chance of a 75-basis point (bs) rate hike in response. As things stand the market reaction has been muted, with market weighing up any shifts in monetary policy with the expectations of a more prolonged economic downturn in the UK if inflation is not brought under control.
As things stand, GBP/USD looks set for further upside, with a decline through the $1.171 swing low required to bring expectations of a pullback for the pair.
AUD/USD continues to grind higher
AUD/USD has continued its move higher, with the risk-on sentiment seen throughout markets bringing about a positive phase for this pair.
While last week saw the index spike upwards, we are seeing a more considered approach this week. Nonetheless, this grind higher does look likely to persist unless price falls back through the $0.6663 swing low.
Look out for further volatility ahead, with the latest Australian jobs report due out tomorrow morning.
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