Forex Brokers Award 2020
Vote your favourite broker
Trade 100 Bonus - the best offer on Forex market

Inflation Day. We Are Keeping Our Eye on the Ball

Jul 17 2019, 07:35 PM (BDT) |


On Wednesday 17th several inflation ratios were published. 

The British CPI was released at 8:30 a.m. GMT. Inflation in Great Britain in June remained at the same level - +2.0% (consumer price index). As we can see from the picture the biggest positive contributions to the change in CPIH 12-month rate were made by food and non-alcoholic beverages as well as clothing and footwear. 

Picture 1. Contribution to change in the CPIH 12-month rate

The reaction in the market: The British pound dropped against the US dollar. 

The European CPI for June was published an hour later. Inflation is growing. The biggest impact was made by Latvia, Hungary, and Romania with annual inflation over 3%. 

Picture 2. Inflation rates (%)


The reaction in the market: finally, bulls found a reason to buy euros. EUR/USD grew.

Lastly, the Canadian CPI was released at 12:30 GMT. In June the CPI fell to -0,2%. The Core CPI MoM (excludes food and energy) remained at zero. 

The inflation in Canada is weakening and the Canadian dollar went down too. The last time we were discussing USD/CAD (it was a month ago) we expected for the US dollar to rise, but unfortunately, we were wrong here. The pair didn’t reach the target 1.34401 and started falling down from 1.34324. 

Technical analysis

The situation is controversial here. On the 1D TF, the 200-EMA reversed down meaning the trend is bearish. But there is a probability that USD will bounce back. We think that it is possible to consider longs if the pair breaks the level 1.31160 (23.6% Fibo correction level) – in this case, we would say that we are dealing with a local ‘double bottom’ pattern. The target for the price will become 1.31763 and 1.32250. 

Picture 3 USD/CAD. 1D TF.

Olymp Trade is a reliable broker, a member of the Financial Commission of A category. This is proof of the high quality of our services and guarantees each trader deposit insurance, comprehensive support and prompt resolution of all issues.