The euro and British pound extended their rallies and further strengthened against the struggling U.S. dollar. With the European Central Bank and the Bank of England gradually shifting the tone toward a more hawkish stance, the euro and pound benefited against the greenback.
The EUR/USD approaches 1.15 and if U.S. key inflation data due at 12:30 UTC misses, we could see at least a test of the crucial 1.15-level. The PCE deflator is considered the Federal Reserve’s favorite inflation gauge and analysts expect the annual rate slowed to 1.4 percent.
The EUR/USD trades currently at 1.1445 and if the pair passes 1.1470, we could see the euro heading for a test of 1.15 and possibly even 1.1550. Sellers of the EUR/USD should either enter at higher resistance levels, taking advantage of potential pullbacks or wait for a decline below 1.1370.
Euro traders should keep an eye on the Eurozone Consumer Prices scheduled for release at 9:00 UTC.
The GBP/USD was able to hold above 1.30, at least for the time being. If the price breaks above 1.3060 we expect the cable to head for 1.3120. A crucial resistance is however seen at 1.3240/50. As long as the pair remains above 1.29, there is no cause for concern for sterling bulls.
The U.K. GDP is scheduled for release at 8:30 UTC.
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