The market is simply marking time for four consecutive days. An empty macroeconomic calendar mostly contributed to this, as there was no significant news as a whole. Therefore, the market's attention has shifted to the US inflation data that will be released today, which will bring the market out of stagnation. The only question is where it will go after that. It all depends on how today's data will be interpreted.
US inflation is expected to rise from 7.0% to 7.1%. And since rumors about raising the Fed's refinancing rate by 0.50% at once began to spread more often in the last couple of days, inflation's further growth may become an argument in favor of such a step. On the other hand, the Fed's tightening of monetary policy is a settled matter, and how fast interest rate hikes will be is more of a rhetorical question. However, the continued inflation growth, and even ahead of wages, is an extremely negative factor for the economy. Thus, the market can go both up and down after the publication of inflation data. It all depends on what exactly the media will focus on.
Inflation (United States):
The EUR/USD pair slowed down its upward movement within the local high on January 14, where a short-term flat 1.1400/1.1480 was formed. In this situation, stagnation indicates the process of accumulation of trading forces in the upcoming acceleration in the market. Thus, keeping the price outside of one or another border of the range will become the starting point of the future movement.
The GBP/USD pair is in the pullback stage from the resistance level of 1.3600, where the level of 1.3500 serves as a variable pivot point. To prolong the downward interest to the level of 1.3400, the quote needs to stay below 1.3490 in the H4 timeframe. Otherwise, stagnation within the current levels may be delayed.
