FOREX NEWS: INFLATION-RELATED INDICATORS INCREASE VOLATILITY
EUR/USD
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.
Technical OutlookThe resistance at 1.3730 wasn�t 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 OutlookThe 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/USDSome Pound strength was seen yesterday and the pair moved above 1.6820 as a result, but the bulls didn�t make any substantial advances and we had a small high-to-low range.
