FOREX NEWS: INFLATION-RELATED INDICATORS INCREASE VOLATILITY
Forex News: Trading was rather slow yesterday, with the Euro climbing steadily throughout the day. Bundesbank President Weidmann said that ECB will be closely watching Forex rates before making a policy decision but the comment was mostly overlooked by market participants.
The resistance at 1.3730 wasnít broken decisively yesterday but some bullish pressure can be seen. We consider this latest move up just a retracement and we expect today another attempt at breaking 1.3700. If price moves below this level, the immediate target is located at 1.3650 but a bounce higher would signify that bears are starting to run out of steam and that more bullish action will follow.Fundamental Outlook
The German Producer Price Index is released today at 6:00 am GMT and expected to increase from the previous -0.3% to 0.0. Changes in the price charged by producers for their goods and services will be have an influence on the price paid by consumers for those goods and services; in other words, the PPI affects inflation and this makes it an important indicator which can strengthen the Euro if higher values are posted.GBP/USD
Some Pound strength was seen yesterday and the pair moved above 1.6820 as a result, but the bulls didnít make any substantial advances and we had a small high-to-low range.