February 11 2022
US CPI beat expectations yesterday. The USD initially tried to strengthen but failed to break support, which triggered a rapid reversal. The resulting failure to stay above 1.3600 has caused the GBP to lose its bullish moment.
Today, we are again looking to test support at 1.3620, and if broken expect a drop to 1.3490 and possibly 1.3440. Only an immediate break back above 1.3580/90 will cable regain its bullish tone.
As with cable, EURUSD hit both sides of the recent range and lost upside momentum.
The EURUSD is trying to break yesterdays low, and if successful the single currency will target 1.1320 and possibly 1.1280 in extension. Only if the EUR can recover back above 1.1440, will the downside threat be negated for more range trading.
USDJPY hit a 116.30 our upside target. The dollar maintains its bullish tone after testing 115.80/60 support. While above this level expect another attempt at 116.30/40 resistance and new highs close to 117.00.
Alternatively, a break back below 115.60 would argue for further losses and a return to 115.20 possibly 114.90.
Gold closely followed the dollars direct since the CPI realise failing to break above 1840, the downside looks like the path of least resistance right now. Support at 1822 is close by and if broken expect more weakness to 1816 and possibly 1812.
If gold can recovery above 1836 then the upside will be back in play with 1842 and 1846 targets possibly 1852.
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