FOREX NEWS: EUROPEAN INFLATION DATA LIKELY TO PUT AN END TO THE CONSOLIDATION PHASE
EUR/USD
Forex News: German inflation stalled, just as analysts expected but the American Gross Domestic Product showed a surprising increase, spurring demand for the greenback and taking the pair below 1.3200 support.
Technical Outlook
The move above 1.3200 couldn’t be sustained by the bulls and price soon dropped below the level but the weekly gap is still not closed so we might see further upside movement. For the time being price is confined between 1.3150 and 1.3220, without clear direction, thus market participants will probably focus on the fundamental aspect which will most likely dictate the next direction.
Fundamental Outlook
Today the main gauge of European inflation is released: the Euro Zone Consumer Price Index. For quite a long time inflation has been lower than ECB’s target of just below 2.0% and if it continues to drop we are likely to see more stimulus added by the ECB, a thing considered bearish for the Euro. Today’s anticipated change is 0.3% while last month’s value was 0.4% and the time of the release is 9:00 am GMT.
GBP/USD
Surprisingly, the positive change of the American Gross Domestic Product didn’t do much for the pair and the US Dollar couldn’t gain substantially against the Pound.
Technical Outlook
A breakout is still anticipated but for the time being price movement is still caped by 1.6600 resistance and 1.6550 support. The Relative Strength Index is moving close to the 50 level and doesn’t show an extreme condition of the market, thus it doesn’t offer a lot of hints about the next move and we maintain our view that a clear breakout, followed by a retest of the broken level, will generate an extended move in that direction.
Fundamental Outlook
The Nationwide Building Society will announce today the change in the selling price of UK homes purchased with mortgages provided by this Society. The indicator acts as a measure of house market inflation and it’s a leading gauge of health for the housing industry. The release is scheduled at 6:00 am GMT, with an anticipated change of 0.0% while the previous was 0.1%; higher values usually strengthen the Pound, driving the pair higher.
We hope you had a profitable trading week and we wish you a relaxing weekend.
Written by: Bogdan Giulvezan
