EUR/USD retreats while USD/CAD, USD/CNH rise on higher US inflation reading
Outlook on EUR/USD, USD/CAD and USD/CNH amid rising US CPI, yields and dollar.
EUR/USD drops on higher-than-expected US inflation
EUR/USD's rise to the upper July-to-October downtrend channel resistance line at $1.0639 has been followed by a swift sell-off as US consumer price index (CPI) inflation came in slightly higher-than-expected which led to bond yields and the US dollar appreciating.
Below Thursday’s low at $1.0526 lies the key $1.0484 to $1.0444 support zone. Provided it holds, EUR/USD may still bottom out from a medium-term perspective. This support area consists of the mid-November high, early and December low and January low.
Minor resistance may be encountered by the last Friday’s high at $1.06 and the late-September high at $1.0617, followed by the May low and mid-September low as well as this week’s high at $1.0632 to $1.0639. Only a rise and daily chart close above these levels would confirm a bottoming formation.
USD/CAD surges back up again as greenback appreciates
USD/CAD, which spent the last couple of weeks in retreat and dropped to C$1.357, has resumed its ascent on higher-than-expected US CPI data with the cross retesting its C$1.3694 September peak. Around it the currency pair is stalling, though.
A slip towards minor support at the C$1.364 August high may ensue with further minor support seen around Wednesday’s C$1.3624 high.
A rise above this week’s high at C$1.37 would put the current October high at C$1.3785 back on the cards.
USD/CNH creeps higher on disappointing China data
As deflation is a worry in China after inflation data there missed expectations of a rise, USD/CNH is cautiously advancing towards the upper end of its mid-September-to-October sideways trading range at CN¥7.3316.
If overcome, the August and September highs at CN¥7.3497 to CN¥7.3681 could be back on the map.
Slips should find support between the 55-day simple moving average (SMA) and the late-September low at CN¥7.2848 to CN¥7.2811 ahead of the July-to-October uptrend line at CN¥7.2785.
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