– An uneasy calm settled over financial markets on Wednesday as investors anxiously awaited the latest US inflation data set to be released in the afternoon.

Inflation is expected to rise 8.8% year-on-year in June compared with 8.6% in May. If expectations match reality, this would mark the fastest increase in consumer prices since the 8.9% figure in December 1981. Given how markets remain highly sensitive and reactive to anything regarding inflation, the pending report could spark fireworks across the board.

Before the report is published this afternoon at 1:30 pm BST, there are a couple of hidden jewels and gems in the FX markets to keep a close eye on.

Are dollar bulls unstoppable?

The Dollar Index (DXY) is heavily bullish on the daily charts. Prices remain in a healthy uptrend and are trading comfortably above the 50, 100, and 200-day Simple Moving Average. A strong move above 108.50 could trigger an incline to levels not seen since June 2002 at 110.00. If prices slip back below the 107.60 regions, this could trigger a technical throwback towards 106.70 and 105.50, respectively.

EURUSD hits parity…what next?

The EURUSD dream parity dream became a reality yesterday as the currency pair kissed 1.000 for the first time in 20 years. This tough psychological support may be a tough nut for bears to crack in the short term. Prices may experience a technical bounce back to 1.0200 before the selloff resumes. Should bears remain relentless and conquer this level, the EURUSD could extend the decline towards 0.9900.

GBPUSD wobbles around 1.1900

A massive selloff could be on the horizon for the GBPUSD with 1.1900 acting as a key level of interest. The trend is heavily bearish but bears need some fresh inspiration to drag the currency pair lower. A stronger dollar could trigger such a selloff, opening a path towards 1.1650. Should 1.1900 prove to be reliable support, this could trap prices back within a 160 pip range.

AUDUSD eyes 0.6700

The path of least resistance for the AUDUSD points south. There have been consistently lower lows and lower highs. Bears seem to be taking a break, resulting in prices pushing back towards 0.8800. Such a development could re-invite bears into the picture with 0.6700 acting as the first checkpoint.

USDJPY hovers around 24 years high

USDJPY bulls remain on a quest to push prices to fresh multi-decade highs

Prices are firmly bullish on the weekly charts and have already broken above the 136.70 resistance level. The breakout and daily close above 136.70 could inspire a move higher towards 138.50 and 142.00. Should bulls run out of steam, prices could decline back towards 134.00.

GBPJPY in choppy uptrend

Things still look quite choppy on the weekly timeframe. After failing to break above 167.50, bears seem to be on the prowl and ready to attack given the opportunity. Prices remain in a very wide range with a breakout needed to determine the GBPJPY medium to longer-term technical outlook. A strong breakdown and daily close under the 158.00 higher low may inspire a selloff towards 151.00. If bulls are able to push above 167.50, this could signal a move towards 170.00.

USDCAD ready to break resistance?

After bouncing within a range over the past few weeks, the USDCAD could be gearing up for a major breakout.  Technically, prices are trading above the 50, 100, and 200- day Simple Moving Average while the MACD trades to the upside. A strong move above 1.3050 could signal an incline towards levels not seen since November 2020 at 1.3200.  Should 1.3050 prove to be reliable resistance, prices could decline back towards 1.2930 and 1.2860, respectively.