Yesterday’s trading has been relatively quiet. After the euro refrained from taking any dips below 1.1145, euro bulls finally got their chance to gain some pips after EUR/USD broke above 1.1215. The British pound, however, followed its downward trend against the U.S. dollar and fell toward its recent support at 1.5155.
Today, traders should focus on eurozone data, such as German Consumer Prices, due for release at 12:00 GMT and important U.S. data, scheduled for release at 14:00 GMT – Consumer Confidence. Furthermore, Bank of England Governor Carney is scheduled to speak in London at 19:40 GMT, which could impact the pound sterling.
While we generally expect the euro to trade lower in the long-run, the pair is currently heading upwards because of less-dovish comments of ECB policymakers, downplaying the possibility of further QE. Nonetheless, today’s inflation data will be interesting to watch, as the report could have a significant impact on the currency. If the German CPI indicates further weakness, the euro could come under increasing pressure.
Next resistances are seen at 1.1275, 1.1320 and 1.1360.
Supports could be at 1.1220, 1.1185 and 1.1120.
The pound showed further weakness versus the greenback despite expectations that the BoE will not be far behind the Federal Reserve in relation of raising interest rates. Speculations are that the BoE could start tightening by February 2016.
If GBP breaks below 1.5135 a next support could be at 1.51 and 1.5080.
We see a current resistance at 1.5210. Above 1.5220, GBP may head for another test of 1.5260 and 1.5285.
U.K. Mortgage Approvals and Net Consumer Credit are scheduled for release at 8:30 GMT, reports which could have only a limited impact on the currency.
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