US dollar slides ahead of inflation data
The price of crude oil is hovering near its highest level in a year as hopes of a new stimulus deal rise. Congress is debating a proposal by Joe Biden to provide $1.9 trillion in the stimulus. These funds will go to individuals, companies, state and local governments. The price is also rising after the latest inventories data from the American Petroleum Institute (API). The data showed that the US inventories fell by another 3.5 million barrels last week after falling by 4.3m a week before. Later today, the Energy Information Administration (EIA) will publish the official data.
The US dollar is falling against key currencies ahead of the key inflation numbers from the country. Economists polled by Reuters expect the data to show that the headline consumer price index (CPI) rose by 1.5% in January after rising by 1.4% in the previous month. They also see the core CPI rising by 1.6%. A strong CPI release will be bullish for the US dollar because it will mean that the Federal Reserve will hike rates earlier than expected. The currency will also react to the latest wholesale inventories and a speech by Jerome Powell.
The Japanese yen declined slightly after the latest producer price index (PPI) data. According to the statistics bureau, the headline PPI increased by 0.4% in January after rising by 0.5% in the previous month. This increase led to an annual decline of 1.6%, which means that the Bank of Japan will maintain negative rates for a while. Elsewhere, in China, the CPI declined by 0.3% while the PPI rose by 0.3%.
The EUR/USD price continued to rise in the American and Asian sessions as traders positioned themselves for US inflation numbers. The pair is trading at 1.2126, substantially higher than Friday's low of 1.1950. On the four-hour chart, the price managed to move above the descending trendline. Also, it moved above the Ichimoku cloud and the short and longer moving averages. Therefore, the pair may continue rising ahead of the CPI data.
The ETH/USD rose to an all-time high of 1,825 as demand for cryptocurrencies continued to rise. On the daily chart, this price is above all moving averages and the dots of the Parabolic SAR. Oscillators like the Relative Strength Index and MACD have also continued to rise. Notably, the current rally is part of the cup and handle pattern, meaning that the price will likely continue rising in the near term.
The GBP/USD pair soared to the highest level in more than two years. On the four-hour chart, the price is above the previous resistance at 1.3759 and the 25-day and 15-day exponential moving averages. Also, the Relative Strength Index (RSI) has continued rising. Therefore, the pair will likely continue rising as bulls target the next resistance at 1.3900.