Prepare For Corrections Around U.S. CPI And FOMC Minutes
The USD continued its recent weakness ahead of today’s U.S. CPI numbers. Subsequently, the EUR/USD was accompanied by a bullish tilt and rose towards 1.2380. Long traders in the euro were thus able to book a good profit by trading our long entry.
It will now be interesting for traders of the EUR/USD as the currency pair could be primed for a technical breakout. If the euro rises above 1.2370/80 we see chances of an extended upward move towards 1.2430. A significant break below 1.2350, however, could shift the short-term bias in favor of the bears with lower targets at 1.2330 and 1.2310. A break below 1.23/1.2290 could even alter the current sentiment from bullish to bearish.
EUR/USD Hourly Chart
The British pound stabilized above 1.4150 against the dollar and now faces the 1.42-barrier. A break above 1.4225 could lead to further strength towards 1.4270. Bears in the GBP/USD should, however, pay attention to a significant break below 1.4080, which could drive the pair towards 1.4025.
Today, the focus will return to economic data and the outlook for U.S. consumer prices (due for release at 12:30 UTC). Later in the day we have the FOMC minutes scheduled for release, so there could be some volatile movements around these releases. Bear in mind that the Federal Reserve is optimistic concerning further rate hikes this year, so the minutes could underline that positive outlook which would be dollar-positive. In other words, prepare for corrective movements around the CPI and FOMC release.
Apart from U.S. data, sterling traders will watch the U.K.’s Industrial Production numbers due for release at 8:30 UTC, while euro traders will listen to a speech of ECB President Mario Draghi at 11:00 UTC.
Here are our daily signal alerts:
EUR/USD Long at 1.2386 SL 25 TP 20, 40 Short at 1.2335 SL 25 TP 20, 40 GBP/USD Long at 1.4191 SL 25 TP 20, 50 Short at 1.4160 SL 25 TP 30-40
We wish you good trades and many pips! Disclaimer: Any and all liability of the author is excluded.