<p style=““ class=“text-align-justify“>Alongside the yen, the pound is a notable laggard today as cable falls further following a breakdown yesterday below 1.2000. The drop also took out support from the 23.6 Fib retracement level of the swing higher since September, seen at 1.1953. That gives sellers with more scope to chase a further downside move – potentially looking at the 100-day moving average (red line) next at 1.1663.</p><p style=““ class=“text-align-justify“>But of course, any further downside leg requires vindication from the US data later today. That will be key for dollar sentiment as the new year finally looks to get rocking.</p><p style=““ class=“text-align-justify“>Elsewhere, EUR/USD is down 0.2% to 1.0500 while AUD/USD is also down 0.2% to 0.6732 at the lows for the day. The latter is continuing to see a rejection of its 200-day moving average play out for now.</p><p style=““ class=“text-align-justify“>In broader markets, equities are tentative with S&P 500 futures flat and Treasury yields are also mostly little changed at the long-end of the curve so far today.</p>

This article was written by Justin Low at www.forexlive.com.

<ul><li>Today’s inflation data is quite positive</li><li>Rates are to rise to the point that it will restore inflation back to 2% target</li></ul><p style=““ class=“text-align-justify“>He is one of the few to mention any talk about a top in terms of the tightening cycle. The others tend to steer clear of any clear line/area when it comes to the supposed terminal rate. As for his take that the inflation data today is „quite positive“, he probably should take a look at the core reading. Pfft.</p>

This article was written by Justin Low at www.forexlive.com.

<p style=““ class=“text-align-justify“>While the headline annual inflation declined more than estimated, as was the case with the German, French, and Italian readings this week, core annual inflation actually jumped higher in December as seen <a target=“_blank“ href=“https://www.forexlive.com/news/eurozone-december-preliminary-cpi-92-vs-97-yy-expected-20230106/“ target=“_blank“ rel=“follow“>here</a>.</p><p style=““ class=“text-align-justify“>That will offer the ECB no respite in their fight against inflation, with rising price pressures becoming more embedded in other parts of the economy. As mentioned yesterday, such tentative signs of slowing inflation (via the headline) <a target=“_blank“ href=“https://www.forexlive.com/news/tentative-signs-of-slowing-inflation-not-going-to-change-the-ecbs-mind-20230105/“ target=“_blank“ rel=“follow“>isn’t going to change the ECB’s mind</a> – at least not yet.</p>

This article was written by Justin Low at www.forexlive.com.