FOREX NEWS: FOCUS SHIFTS ON THE US DOLLAR: U.S. RETAIL SALES AND INFLATION DATA
EUR/USD
Forex News: Yesterday’s trading session belonged to the bears, who managed to test 1.0850 support, partly helped by a better than expected value of the U.S. Producer Price Index.
Technical Outlook
The pair is slowly making its way lower but the support at 1.0850 is still not broken and can reject price higher. The short term bias is bearish, anticipating a move into 1.0800 and a closing of the gap later on. A move above the 50 period Exponential Moving Average would invalidate our bearish scenario for the time being and keep in mind that today the US Dollar will be affected by important releases so the technical side will be secondary.
Fundamental Outlook
At 12:30 pm GMT the U.S. Consumer Price Index is released, showing changes in the price paid by consumers for the goods and services they purchase. The expected value is 0.3% and because the indicator has inflationary implications, higher numbers usually strengthen the US Dollar.
At the same time another important indicator comes out: the U.S. Retail Sales, expected to show a change of 0.6% from the previous -0.2%. Sales made at retail level represent the main part of consumer spending, which in turn accounts for the major part of economic activity, so higher numbers can also strengthen the U.S. Dollar.
GBP/USD
The Bank of England kept the rate unchanged as expected but the Monetary Policy Summary and Governor Carney’s press conference triggered a boost of volatility and moved the pair into key support.
Technical Outlook
The pair has moved strongly below the 50 period Exponential Moving Average and is now facing a key level at 1.2855 (1.2850). We will probably see some sort of rejection here, but the extent should be limited and followed by a break of the mentioned support, if the pair will remain below the 50 period EMA and below 1.2900. Also keep in mind that the US Dollar will be affected by important economic releases that will play a major role for today’s price direction.
Fundamental Outlook
The Pound doesn’t have anything major on the economic calendar, so the pair’s movement will be mainly influenced by the USD releases and the technical aspect.