The euro rose against dollar on Wednesday after the U.S. Fed. Reserve Chair Jerome Powell reassured the market again that an inflation spike will be transitory. Powell noted in prepared congressional testimony that inflation will remain around the Fed’s 2% target and the U.S. economy was «still a ways off» from levels the Fed wanted to see before tapering its stimulus support. The dollar index, which tracks the greenback versus a basket of six currencies, fell 0.4% to 92.38. Immediate resistance can be seen at 1.1870. A breakout to the upside can trigger growth towards 1.1950.
BuyStop 1.1870/TP 1.1950/SL 1.1840
GBP/USD
Sterling climbed against the dollar on Wednesday as UK inflation rose more than expected to its highest in almost three years, putting the focus on the Bank of England’s plan to keep its huge stimulus program in place. Inflation jumped further above the BoEs 2% target to hit 2.5% in June, its highest since August 2018. Higher prices for food, fuel and used cars as the economy bounced back from its lockdown slump were among the key drivers. In the event that the regulator admits the possibility of policy tightening, the pound’s growth will continue. Immediate resistance can be seen at 1.3870. The breakout up can trigger growth towards 1.40.
BuyStop 1.3870/TP 1.40/SL 1.3830
USD/CAD
The Canadian dollar was little changed against the U.S. dollar on Wednesday as the Bank of Canada reduced the scope of its bond-buying program but held its key interest rates at a record low. The «loonie» cut its gains against the U.S. dollar following the Bank of Canada’s announcement. The bank also warned that inflation would be higher than previously forecast over the near term. The bank cut its weekly net purchases of Canadian government bonds to a target of $2 billion Canadian dollars from C$3 billion. Immediate support is seen at 1.25. The breakout to the downside could take the pair towards 1.24.
SellStop 1.25/TP 1.24/SL 1.2540
