Further Gains In The British Pound? Focus On CPI Data
Dear Traders,
The euro ended the day unchanged against the U.S. dollar after it fluctuated considerably on Federal Reserve Governor Lael Brainard’s comments. She remained dovish and urged “prudence” in her approach to tighter monetary policy, even as she acknowledged that the U.S. economy is moving toward achieving the Fed’s goals of maximum employment and 2 percent inflation. Traders had to struggle with unsteady price movements in the EUR/USD, leading to losses instead of profits. The most important piece of economic data from the eurozone will be the German and Eurozone ZEW Survey, due to be released at 9:00 UTC. We hope for a breakout of the euro’s recent trading range, sending the pair towards 1.1315 on the upside or 1.1170 on the downside.
Unlike the euro, the British pound trended upwards and provided a good gain with both of our long-entries. Thus our swing long-entry at 1.3240 already proved to be highly profitable.
The U.K. Consumer Price report is scheduled for release at 8:30 UTC and should have a significant impact on the pound. Chances are that sterling extends its gains towards 1.3375 and even 1.3440. A break below 1.3250 however could shift the bias from bullish to bearish.
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