As we head into Thursday, February 13, 2025, global markets are positioned for a session that could see heightened volatility, driven by key U.S. inflation data and its impact on major currency pairs. The U.S. dollar came under significant pressure following the higher-than-expected Core CPI data, which came in at 0.4% MoM, exceeding forecasts of 0.3%. This data reinforced expectations of a more hawkish stance from the Federal Reserve, yet the dollar weakened as traders interpreted the inflation uptick as a sign that economic strain may soon weigh on consumer spending.
In the currency markets, the EUR/USD pair surged past 1.0420, recovering strongly after an initial dip, reflecting a weaker dollar and resilient Eurozone GDP figures. Similarly, GBP/USD rallied to 1.2470, buoyed by better-than-expected UK GDP data and a broad-based decline in the dollar. Meanwhile, AUD/USD rebounded sharply, climbing above 0.6300, as risk sentiment improved amid stabilizing commodity prices.
EUR/USD
Technicals in Focus
The EUR/USD pair experienced strong bullish momentum, breaking above 1.0420 after rebounding from earlier losses. The higher-than-expected U.S. inflation data initially sparked dollar strength, but the pair found support and surged as traders reassessed the Fed’s policy stance.
On the technical front, the MACD indicator is in positive territory, signaling bullish momentum. The Stochastic Oscillator is nearing overbought levels, suggesting potential consolidation before the next move. The 14-day RSI sits at 61, reinforcing the pair’s upward bias.
Trading Strategy: Neutral to Buy
- Buy above 1.0400-1.0420, with upside targets at 1.0450-1.0480, with a stop loss below 1.0370.
- Alternatively, sell below 1.0370, with downside targets at 1.0340-1.0310, with stops above 1.0400.
GBP/USD
Technicals in Focus
The GBP/USD pair saw a sharp rally, climbing above 1.2470 following strong UK GDP data. Quarterly GDP (QoQ) came in at -0.1%, but annual growth (YoY) beat expectations at 1.1%. Combined with U.S. dollar weakness, this fueled a strong uptrend in the pound.
The MACD is trending higher, confirming the bullish breakout. The Stochastic Oscillator has entered overbought territory, signaling possible short-term consolidation. The 14-day RSI is approaching 65, reinforcing buying pressure.
Trading Strategy: Neutral to Buy
- Buy above 1.2450-1.2470, with upside targets at 1.2500-1.2530, with a stop loss below 1.2420.
- Alternatively, sell below 1.2420, with downside targets at 1.2380-1.2350, with stops above 1.2450.
AUD/USD
Technicals in Focus
The AUD/USD pair reversed sharply higher, surging past 0.6300 after touching intraday lows. The rally was fueled by risk-on sentiment, supported by a weak U.S. dollar and stabilization in commodity markets.
On the technical front, the MACD is in positive divergence, suggesting increasing bullish momentum. The Stochastic Oscillator is moving into overbought territory, while the 14-day RSI is at 59, signaling continued upside potential.
Trading Strategy: Neutral to Buy
- Buy above 0.6280-0.6300, with targets at 0.6330-0.6360, with a stop loss below 0.6260.
- Alternatively, sell below 0.6260, with targets at 0.6230-0.6200, with stops above 0.6280.
Market Outlook
Looking ahead, the U.S. retail sales data set for release will be closely watched as a gauge of consumer strength amid higher inflation. Additionally, traders will monitor any statements from Federal Reserve officials for further insights into the central bank’s stance following the latest inflation print.
- The EUR/USD remains bullish as the euro benefits from a weaker dollar and stable Eurozone growth.
- The GBP/USD continues its upward momentum, backed by strong UK GDP data.
- The AUD/USD maintains a positive outlook, with risk sentiment driving gains.
Overall, volatility remains elevated, with further price swings expected as traders react to upcoming data releases and central bank commentary.