The US CPI data came in stronger than expected, and that has sent the US dollar higher, stocks lower, and yields higher.
In this video I take a look at the move after the CPI and explain the bias shifts to the upside, the risk levels that would have traders scratching their heads a bit, and the targets for the three major currency pairs – the EURUSD, USDJPY and GBPUSD.
For the EURUSD it fell below its 200 hour moving out at 1.08134, a key swing area between 1.0795 and 1.0803. Staying below each keeps the sellers more in control.
For the USDJPY, it pushed above its 2022, 2023, 2024 high prices between 151.91 and 151.967. That level is now a risk level for buyers. With the price trading at the highest level since 1990, there isn’t a lot of resistance to grasp onto. So traders should initially look for levels that should not happen if the buyers are to stay in full control. That area is the old ceiling level outlined above.
For the GBPUSD, its price moved down to test the “value area” support at 1.2594 and just below that the key 200 day MA at 1.2586. The price needs to extend below those levels and stay below it increase the bearish bias. The price has made attempts to move below those levels in the past, but there has been buyers at 1.25386 the last two major declines. Can the price now stay outside the “value area” and work at moving lower?