FOREX NEWS: FOMC MEETING MINUTES: TELLING THE STORY OF THE NEXT RATE HIKE
EUR/USD
Forex News: U.S. inflation data disappointed yesterday and this was one of the reasons why the pair climbed strongly; however the CPI wasn’t much lower than anticipated so that was not the only reason for the climb.
Technical Outlook
The level at 1.1186 turned into support and pushed price higher in yesterday’s trading session but such a fast climb is likely to retrace lower, possibly into 1.1240 which was also broken during the rally. The Relative Strength Index is hooking down, after reaching overbought territory and this is another indication that a move lower will follow. After this anticipated retracement, if price remains above the 50 period EMA, we expect another push higher.
Fundamental Outlook
The Euro will not be affected by economic releases today and on the US Dollar side we have the always important FOMC Meeting Minutes, released at 6:00 pm GMT. This document contains a detailed record of the latest Fed meeting regarding interest rates and usually contains hints about future rate moves. If this is the case, we expect strong movement on USD pairs.
GBP/USD
The British CPI showed slight improvement and this, combined with the disappointing U.S. data, triggered a retracement higher and a bullish session.
Technical Outlook
As long as the pair is trading below the 50 period Exponential Moving Average, our bias is still bearish and consider this just a much needed retracement which was already anticipated. The candles start to show long wicks, which is a clear sign that the bullish impulse is fading away, thus we expect price to move lower today. As an alternate scenario, a break of the 50 EMA will likely take the pair into 1.3070 which is now resistance.
Fundamental Outlook
Today at 8:30 am GMT we take a look at British unemployment with the release of the Claimant Count Change, an indicator that tracks changes in the total number of people who asked for social help due to their unemployed condition. Higher numbers than the anticipated 5.2K (previous 0.4K) usually weaken the Pound.