An uneasy calm settled in financial markets on Wednesday as investors eagerly awaited the latest US inflation data due out in the afternoon.

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

Before the report is released this afternoon at 1:30 p.m. BST, there are a few gems and hidden gems in the forex markets to watch closely.

Are dollar bulls unstoppable?

The Dollar Index (DXY) is strongly 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 a tilt to levels not seen since June 2002 at 110.00. If prices break back below the 107.60 regions, it could trigger a technical retrace towards 106.70 and 105.50, respectively.

The EURUSD reaches parity… and then?

The EURUSD parity dream came true yesterday as the currency pair kissed 1,000 for the first time in 20 years. This difficult psychological support can be a difficult problem for bears to solve in the short term. Prices may see a technical bounce back to 1.0200 before the selloff resumes. Should the bears remain relentless and conquer this level, the EURUSD may extend the decline towards 0.9900.

GBPUSD hovers around 1.1900

A sell-off could be on the horizon for GBPUSD with 1.1900 acting as a key level of interest. The trend is strongly bearish, but the bears need fresh inspiration to push the currency pair lower. A stronger dollar could trigger such a selloff, paving the way towards 1.1650. Should 1.1900 prove to be reliable support, it could trap prices in a 160 pip range.

AUDUSD eyes 0.6700

The path of least resistance for the AUDUSD points south. There have always been lower lows and higher highs. The bears appear to be taking a break, pushing prices back towards 0.8800. Such a development could invite the bears back into the picture with 0.6700 acting as the first point of control.

USDJPY hovers around 24-year high

USDJPY bulls continue to look to push prices to new multi-decade highs

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

GBPJPY in a choppy uptrend

Things still look pretty hectic on the weekly schedule. After failing to break above 167.50, the bears appear to be on the prowl and ready to attack should the opportunity arise. Price remains in a very wide range with a break needed to determine the medium to long term GBPJPY technical outlook. A strong break and a daily close below the 158.00 low could inspire a sell-off towards 151.00. If the bulls are able to push above 167.50, it could signal a move towards 170.00.

USDCAD ready to break resistance?

After bouncing in a range over the past few weeks, the USDCAD may be bracing for a major breakout. Technically, prices are trading above the 50-, 100-, and 200-day simple moving average while the MACD is trading higher. A strong move above 1.3050 could signal a tilt towards levels not seen since November 2020 at 1.3200. Should 1.3050 prove to be a reliable resistance, prices may retreat towards 1.2930 and 1.2860, respectively.