THE US DOLLAR IS MAKING A COMEBACK
The prices of major world currencies fell against the US dollar today on the background of profit taking after the rally based on the greenback’s weakening. The common currency received some negative news today as the Social Democratic party in Germany refused to form a coalition. Moreover, investors negatively reacted to the news that the ECB is unlikely to reduce the asset purchasing program until the consumer price index in the Eurozone reaches 2.0%. Tomorrow the market focus will be on the final CPI report in the Eurozone for December and industrial production data in the US.
The GBP/USD decreased today due to technical factors and the fall of consumer inflation to 3.0% in December against the 3.1% in the previous month. The appreciation of the pound is likely to lead to a decline of the CPI in the UK and that in turn will give less reasons for the Bank of England to increase interest rates.
The Australian dollar moved down slightly today despite positive statistics on new motor vehicle sales that increased by 4.5% in December compared to 0.2% in November. Today, the course of trading is likely to be impacted by the Westpac consumer sentiment release at 23:30 GMT.
The USD/JPY pair is likely to be influenced by core machinery orders in November which are due to be released at 23:50 GMT.
The EUR/USD price retreated today after some consolidation. Quotes have crossed the SMA100 line on the 15-minute chart which is a negative signal for the bulls and that may force them to fix profits. The potential fall is likely to be limited by the support at 1.2070. In case of growth resuming, the next target will be 1.2400.
The GBP/USD corrected after some consolidation near 1.3800. In order to continue the rising dynamics with the objective at 1.4000, the price needs to overcome resistance at 1.3850. In case of further descending correction, the price may return to the strong support at 1.3600. Volatility is likely to reduce but may stay above the average level.
The AUD/USD has not reached the psychologically important 0.8000 level and rolled back slightly within the limits of the rising channel. After the end of the current correction, the quotes are likely to resume positive dynamics with the immediate target at 0.8000. In order to change the current bullish trend to bearish, the price needs to break through the lower limit of the channel and the local low of 0.7850.