Multiple Inflation Readings in Focus | Market Outlook, Feb 19, 2018

Market Outlook

Multiple Inflation Readings in Focus

Gold had another go at the resistance at $1351/oz., briefly breaking it but failed to gain any further closing lower at $1349/oz. US data from last week was supportive of gold as stagflation worries returned with US inflation was seen higher, while retail sales were lower.

EURUSD was driven by US dollar movement as Europe had no major data releases last week. Weakening US dollar helped EURUSD hit a high of 1.2550 before Friday’s profit booking bought it down to end the week at 1.2410.

GBPUSD too was supported helped by strong inflation data on Tuesday and a weak US dollar.

USDJPY was floored as the crucial 108 level gave way. Stagflation worries trumped rising Treasury yields as dollar was sold.

USDCAD continues to be worried by the fate of NAFTA as it continues to trade in the broad range.

Gold has another failure at $1351/oz., it would be crucial for the bulls that $1351/oz. is broken fast else a deep correction as seen before might ensue. First level of support comes in at $1342/oz. and $1319/oz.

EURUSD last week was only at shouting distance from the crucial resistance at 1.2650 before selling ensued. EURUSD continues to be in strong uptrend with support coming in at 1.2300 and 1.2200. Next week has EU retail sales and German economic sentiment to look forward to.

GBPUSD closed last week on a weak note. Brexit deadlock and disappointing economic data continues to be a drag on GBP. The coming week has host of crucial data on Wednesday with UK employment and inflation hearing on the table. GBPUSD though still within the long-term uptrend, next week should see some selling with resistance at 1.4100 holding unless the data surprises on the upside.

USDJPY remains weak and immediate resistance is seen at 106.50 and no major support seen till 100.

USDCAD looks weak on charts with crucial resistance coming in at 1.2610, support is seen at 1.2480. Traders would also be closely watching Friday’s Canadian inflation data.

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