The markets are awaiting the publication of January CPI inflation data from the US. At the top of the list of investors' worries is accelerating inflation, which will lead central banks to faster tighten monetary policy, thus cooling the recovery. At the beginning of February, the US labor market report (including higher wage growth) became a catalyst for stock market sales, which spilled the risk aversion into other asset classes. In this context, today's CPI data can act like pouring oil into the fire. For that to happen, the CPI must surprise positively, but expectations are already high (0.3% m / m) thanks to the increase in the price of piles at the beginning of the year. So the bar for a positive surprise is suspended high and the market does not really believe that it will be jumped over. This explains calmness on the stock market and pairs with commodity currencies, but it also means a return to USD sell-off - a fall in USD / JPY and an increase in EUR / USD in the last hours cannot be explained by global investors escaping to safe havens. However, at the end of the day it will be counted in which direction the stock market indexes went.
Today's US publication is important, but not necessarily a catalyst for volatility in the markets. Just as well over the next few days, we can still witness relative stability; attempts to find strength between bulls and bears by education of a stronger and more lasting tendency.
Let's now take a look at the EUR/USD technical picture at the H4 time frame. The market has moved above the technical resistance at the level of 1.2333 (now support) and made a local high at the level of 1.2393. which is a 61% Fibo retracement of the last leg down. The market conditions are now overbought, so the price might test the level of 1.2333 and 1.2314.
