The British pound extended its gains towards 1.4350 after CPI data came in stronger than expected, reaching the highest level since December 2014. Nonetheless, the pound was not able to maintain the high price level and finally ended the day unchanged against the U.S. dollar. Our focus now shifts to the next support level at 1.4225. In case of a break below 1.4225, lower targets are seen at 1.4207, 1.4195 and 1.4170. The market’s attention is focused on U.S. Retail Sales, scheduled for release at 12:30 GMT and as the figure is a significant market mover and expected to show a rise in March, market participants might be inclined to be bullish on USD ahead of the report.
The euro peaked at a yearly high of 1.1465 before prices quickly reversed direction and dropped back to below 1.14. The attention is now directed to the lower band of the euro’s current trading range. A break below 1.1335 could boost bearish momentum and send the euro towards 1.13 and 1.1285. Below 1.1280 we expect the euro to decline toward the 1.12-level. However, in case of renewed upward momentum, we will pay attention to current resistance levels at 1.14 and 1.1430 but bullish movements exceeding these levels could be limited until 1.1470.
The U.S. Retail Sales report will be the most important piece of economic data today and Industrial Production figures from the Eurozone (9:00 GMT) and the Fed’s Beige Book (18:00 GMT) could thus take a backseat.
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