EUR/USD, AUD/USD eagerly await US consumer price index (CPI) data while EUR/GBP recovers
Outlook on EUR/USD, EUR/GBP and AUD/USD ahead of Thursday’s US inflation data.
EUR/USD awaits US inflation data out on Thursday
Following on from Friday’s US non-farm payroll (NFP) data, EUR/USD reversed its short-term downtrend from last week’s low at $1.0484 and is getting ever closer to its May 2022 peak at $1.0787 while volatility is decreasing as investors await Thursday’s US inflation data.
If $1.0787 were to be bettered, the March 2022 low at $1.0806 would be eyed ahead of the 50% retracement of the 2021 to 2022 decline at $1.094.
Minor support is to be found at the late-December high at $1.0715 and further down below Friday’s $1.0648 high between the $1.0595 early-December high and the $1.0574 19 December low.
EUR/GBP is seen heading back up again
EUR/GBP is seen heading back up towards its October to late December as well as early January highs at £0.8867 to £0.8877 which represent key resistance.
Only a daily chart close above the December high at £0.8877 would put the minor psychological £0.900 region on the plate.
While the December-to-January support line at £0.8791 and the £0.8783 early January low underpin, the cross remains supported.
AUD/USD trades in five-month highs amid retail sales and inflation data
AUD/USDis seen to recover from Tuesday’s $0.686 intraday low which was made slightly above the 200-day simple moving average (SMA) at $0.6837 and nears its five-month high at $0.6949 amid strong Australian retail sales data and as inflation continues to climb.
Australian retail sales growth beat estimates and increased by 1.4% month-on-month in November, accelerating from an upwardly revised 0.4% in October and exceeding analyst forecasts of a 0.6% rise. The Australian consumer price index (CPI) also increased, however, and rose to 7.3% in November compared to the year before and October’s 6.9% rise.
The fact that cross has been trading above its SMA for three consecutive days for the first time since April 2022 on news that China is planning to reverse a two-year ban on imports of Australian coal is technically significant.
AUD/USD had been thwarted by the 200-day SMA in May, June, August and December of last year and the fact that several daily closes above it have now been seen indicates that further upside towards the $0.7136 August peak is probably in store.
The January 2022 low at $0.6968 as well as the late August high at $0.7009 are the first minor resistance levels to be seen.
This bullish forecast remains valid while no unexpected bearish reversal takes the currency pair to below its current January low at $0.6688.
Minor support above this low comes in along the 200-day SMA at $0.6837 and at the $0.6801 28 December high.
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