GBP/USD drops after CPI news, while weaker dollar loses ground against Australian and Canadian dollars
A drop in UK consumer price inflation (CPI) has sent GBP/USD into retreat, while AUD/USD continues to rise and USD/CAD keeps falling thanks to a weakening US dollar.
GBP/USD reverses course after inflation data
GBP/USD revived the move higher on Tuesday, recovering from the losses of Friday and Monday, but today’s consumer privce index (CPI) figures have knocked it back once more.
Should the CPI news lead to a more sustained fall, we could then see a reversal back below $1.27, which could could open the way to another test of the 200-day simple moving average (SMA) and the lows of December around $1.25.
Buyers will need a close back above $1.276 to indicate that they have been able to reassert control.
AUD/USD keeps on climbing
The past week has seen the price rebound for AUD/USD spectacularly, and revives the uptrend from the October-lows.
The June and July highs at $0.69 now come into view. In the short-term bullish momentum will likely carry the price higher, moving the pair to fresh multi-month highs.
A reversal back below $0.667 is needed to stem upside momentum for the time being. This might then see the price head back towards the 200-day SMA.
USD/CAD hits four-month low
USD/CAD decline continues, with the price dropping to its lowest level since early August on Tuesday.
This puts it below the C$1.38 lows of mid-September, and leaves it on course to target the lows of July around C$1.31.
A recovery above C$1.34 might suggest some short-term strength and indicate that a low is in for the time being.
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