Decreased speculation on Fed Rate Hike

Dear Traders,

Chances of a Federal Reserve rate hike have fallen to 30 percent on the back of weaker U.S. data and China’s  slowdown, essentially complicating the Fed’s decision tomorrow. The latest U.S. reports missed expectations and fueled speculation that the central bank could delay the first rate hike.

The euro bounced off its current support area at 1.1255 and is currently heading for a reconquest of the 1.13-mark. The British Pound declined on weak U.K. inflation data, indicating that an early 2016 BoE rate increase is less likely.

Sterling traders should keep an eye on today’s U.K. labor market data, scheduled for release at 8:30 GMT.

Technically, chances are that GBP could experience a small relief rally towards 1.5440.


The next resistance zone will be at 1.54. If wee see a sustained break above this level, next bullish targets could be at 1.5440 and 1.5470. With a break below 1.5330, on the other hand, we expect bearish momentum to increase.


Focus on Consumer Prices

Consumer Price Indices from the Eurozone and the U.S. are scheduled for release today. Traders should pay attention to these reports, as any surprises could trigger volatile moves.

9:00 EUR Eurozone CPI

12:30 USA CPI

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