Risk Sentiment Improves Somewhat, FOMC Minutes and UK CPIs Eyed

Virus Cases Slow, EUR Keeps Bleeding, FOMC Minutes on the Agenda

The dollar traded higher or unchanged against the other G10 currencies on Tuesday and during the Asian morning Wednesday. It gained the most against SEK, NZD and EUR in that order, while it traded virtually unchanged versus GBP, AUD and CAD.

EUR/USD — Technical Outlook

EUR/USD still remains under the rulership of the bears, as it continues to slide, while trading below a short-term downside resistance line taken from the high of February 3 rd. Although the pair already seems to be quite oversold on all timeframes, as long as it moves below that downside line, we will remain bearish.

GBP-Traders Await UK CPIs, AUD Up Ahead of Jobs Data

Passing the ball to the pound, the British currency was among the main gainers yesterday, despite the weaker than expected employment data for December. The unemployment rate held steady at its 45-year low of 3.8%, but average weekly earnings, both including and excluding bonuses, have slowed by more than anticipated.

GBP/AUD — Technical Outlook

Overall, GBP/AUD continues to balance above two of its upside lines: a medium-term tentative one drawn from the low of January 14 thand a short-term support line taken from the low of February 12 th. Even if the shorter-term one breaks, still, the bulls have a chance to take control near the medium-term one, if it stays intact. But in order to get comfortable with the upside again at this point in time, we would like to see a clear push above the 1.9517 barrier first, hence why we will remain cautiously bullish for now.

As for the Rest of Today’s Events

Early in the EU session, Sweden releases its inflation data for January. Both the CPI and CPIF rates are expected to have ticked down to +1.7% and +1.6% yoy from +1.8% and 1.7% respectively. That said, we repeat for the umpteenth time that we will pay more attention to the core CPIF rate, which excludes the volatile items of energy. In December, that rate ticked down to +1.7% yoy from +1.8%.

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