Today promises to be a significant day with numerous market-moving events. We've already seen some action with the UK GDP data coming in at a surprising 0.4%, surpassing the expected 0.2%. This unexpected strength has propelled the British Pound, making it the strongest currency among the majors today.
Meanwhile, the Canadian dollar and Japanese Yen are both showing weakness. The US dollar is experiencing a mild correction, but all eyes are on the upcoming US inflation data. The market expects an annual inflation rate of 3.1% and a monthly increase of 0.1%. These figures will likely drive significant market activity, influencing not only forex but also commodities and indices.
In the realm of indices, yesterday's US trading session was highly positive, with major indices pushing towards or reaching long-term highs. In contrast, European indices are struggling. The French CAC 40 has been trapped in a sideways trend, the German DAX is navigating a symmetric triangle, and the FTSE 100 is confined within a wedge pattern. Despite being close, European markets are not matching the bullish momentum seen in the US.
Commodities are also presenting interesting movements. Oil continues its descent after hitting a key support level, while precious metals like gold and silver are trending upwards. This divergence highlights the mixed sentiment in the commodities market. With the US inflation data due later today, we can anticipate heightened volatility across the board. Traders should prepare for potential breakouts and shifts in market direction as these key economic indicators are released.