Crude inventories are up, decline was expected

Crude oil inventories are up -> Crude oil prices are down

U.S. CPI: Meets Consensus Estimate But Inflation Is Getting High

Inflationary pressures are finally being felt by consumers. Investors have been wondering how long it would take for the high energy and food prices to filter through to other sectors.

High inflation is a bullish indicator for a currency. As such, we saw a correction on the EUR/SD to 1.4620 after the release of this data.

USD/CAD - 250 pips in yesterday session

The USD/CAD made more than a 250 pip moving during yesterday's session to go from 0.9452 to 0.9704. During this same session we must note that the crude oil prices also saw a significant drop. This serves as a good reminder of the high Canadian Dollar correlation with crude oil as Canada is a big crude oil exporter and actually the number one exporter to the US!

Note, you want to trade crude in the currency market?, try the USD/CAD!

Possible entry point for EUR/USD

The EUR/USD is reaching its 200 hour moving average after a significant recovery in the dollar. These short-term corrections could prove to be good entry points if today's dollar rally does not continue. The currency pair has already bounced off its support once in the last hour.

Possible trade setup:

Long at 1.4550 – 1.4570 with stop order 5-10 pips below today's low of 1.4547. Good reward to risk ratio.