EUR/USD, USD/JPY and EUR/GBP post US December CPI release
Outlook on EUR/USD, EUR/GBP and USD/JPY as US inflation drops as expected.
EUR/USD continues its surge higher post US inflation release
EUR/USD’s strong rally from last week’s $1.0484 low continues to surge ahead as US consumer price index (CPI) came in as expected at -0.1% month-on-month (MoM) and 6.5% compared to the year before versus a previous 0.1% and 7.1%.
The late-April 2022 high and the 50% retracement of the 2021 to 2022 decline at $1.0936 to $1.094 are now in focus, ahead of the psychological $1.10 mark.
Support below the January accelerated support line at $1.0792 and the May 2022 peak at $1.0787 sits between the mid- to late December highs at $1.0736 to $1.0715.
EUR/GBP trades in three-month highs as UK GDP comes in slightly better than expected
On Wednesday, EUR/GBP briefly overcame its October to late-December as well as early January highs at £0.8867 to £0.8877 by rising to $0.8897 before short term-consolidating as UK gross domestic product (GDP) came in better than expected.
It dropped by 0.3% for the three-months to December versus its 0.4% drop for the three-months to November with the British economy expanding 0.1% MoM in November, easing from a 0.5% growth in the previous period and beating market expectations of a 0.2% decline.
A rise above Friday’s high at £0.8897 high would push the minor psychological £0.90 mark to the fore. While the December-to-January support line at £0.8812 underpins, the cross remains in a medium-term uptrend. Slightly further down lies the £0.8783 early January low.
USD/JPY trades in eight-month lows post US inflation data
USD/JPY’s descent has swiftly taken it to eight-month lows as US inflation continues to slide and alongside it the greenback with the late-April and May 2022 lows at ¥126.95 to ¥129.36 now being in focus.
Any possible short-term bounce may encounter minor resistance at the ¥129.52 early-January low above which the 20 December trough can be spotted at ¥130.58. Downside pressure should retain the upper while no rise above Wednesday’s high at ¥132.87 takes place.
The medium-term downtrend will remain valid while the late December and current January highs at ¥134.50 to ¥134.77 cap on a daily chart closing basis.
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