Inflation is Still Far from its Targets
MARKET NEWS SUMMARY
Yesterday, Tuesday, February 14, the US Department of Labor announced that the consumer price index in the United States rose 0.5% last month after rising 0.1% in December.
The month-on-month increase in inflation was partly affected by higher gasoline prices, which increased 3.6% in January, according to data from the US Energy Information Administration. Excluding volatile food and energy prices, the consumer price index rose 0.4% last month. That is the same rate as it rose in December.
The annual inflation rate in America slowed from 6.5% to 6.4% in January but came in above expectations of 6.2%.
Stock indexes fell in the morning as Richmond Fed President Thomas Barkin told Bloomberg TV that the central bank may “have to do more” to combat inflation, and Dallas Fed President Lori Logan said rate hikes could last “for a while longer.” than previously expected.”
Dollar Index (USDX)
David Solomon, head of Goldman Sachs, said the prospects for the US economy avoiding a recession (soft landing) this year have improved.
On Tuesday, February 14th, Soloman said, “I think that the opportunity to have of a less severe economic downturn is better now than it was 6 to 9 months ago.”
The dollar index, which was subjected to significant fluctuations yesterday is trying to stabilize at its pivotal point around 103.00.
Pivot Point: 103.00
| Resistance level | Support Level |
| 103.55 | 102.85 |
| 103.70 | 102.54 |
| 104.10 | 102.00 |
British Pound (GBPUSD)
Investors are watching the Consumer Price Index data in Britain which is expected to drop from 10.5% to 10.3%.
This percentage is worrisome because it is still high and far from the targets of the Central Bank of England and threatens the British economy to suffer a great recession.
Pivot Point: 1.2185
| Resistance level | Support level |
| 1.2254 | 1.2135 |
| 1.2300 | 1.2100 |
| 1.2335 | 1.2060 |
Spot Gold (XAUUSD)
Gold prices fell yesterday after a major fluctuation in prices from 1870 to below 1850, to return again today and test the support levels at 1845.
And this was after the US inflation data came more than expected, which indicated to investors that more tightening in monetary policy is required, which means greater strength on the US dollar and investors’ tendency to deal with it as a safe asset again after their abandonment of gold.
Pivot Point: 1,855
| Resistance level | Support level |
| 1,862 | 1,844 |
| 1,868 | 1,840 |
| 1,873 | 1,832 |
US Crude (USOUSD)
Oil prices continued to decline since Monday’s close with the announcement of the US selling more crude oil from its strategic reserves, in addition to pressures from the inflation rate that exceeded expectations.
The Strategic Petroleum Reserve will drop to its lowest level in more than 40 years as a result of the US administration’s decision to continue selling 26 million barrels of crude oil under a congressional mandate.
West Texas Intermediate crude settled at around $79 a barrel, declining during the day’s trading, but recovered from a decline of more than 3% early in the session after data showed consumer prices in the United States rose by the highest rate in three months.
Pivot Point: 78.60
| Support level | Resistance level |
| 78.00 | 79.00 |
| 77.40 | 79.80 |
| 76.60 | 80.70 |
