FOREX NEWS: INFLATION AND MANUFACTURING DATA IN THE SPOTLIGHT
EUR/USDForex News: Friday the bulls made their presence known by taking the pair into 1.3650 resistance. The move was mostly triggered by technical reasons, backed by market indecision due to the approaching of the ECB rate decision.
Technical OutlookFor the last couple of weeks the pair�s movement has been sluggish and low volatility was present. The move north seen Friday is not considered an attempt of the bulls to take control of the pair, but rather just a normal retracement in a slow downtrend. If the pair travels above 1.3700, it would signify that bulls still have underlying power and would open the door for further upside movement, but until that happens, the medium term downtrend is intact and we are likely to see a touch of 1.3585.
Fundamental OutlookGermany will announce today at 12:00 pm GMT their Consumer Price Index. The CPI is the prime measurement of inflation and for today�s release a change of 0.1% is anticipated, while the previous value was -0.2%. Higher German inflation is considered beneficial for the entire Euro Zone and hence, for the single currency itself. At 2:00 pm GMT the US Manufacturing PMI is released and the anticipated value is 55.7, compared with the previous 54.9. Better numbers suggest optimism among purchasing managers from the manufacturing sector and usually boost the greenback.
GBP/USDThe pair retraced higher Friday but the move was not generated by surprise announcements or by economic data and instead we attribute it to technical reasons.
Technical OutlookThe oversold condition of the Relative Strength Index signaled in advance a possible bullish move and now price is sitting above the important 1.6750 level. If the bears can manage to take the pair quickly back below this level, the chance of an encounter with 1.6680 support will increase. Otherwise, we are likely to see a touch of 1.6820 in the near future.
Fundamental OutlookUnited Kingdom�s Manufacturing PMI is released today at 8:30 am GMT and expected to decrease almost insignificantly from the previous 57.3 to 57.1. A bigger decrease than expected would negatively affect the Pound and would allow the pair to travel south. The US indicator mentioned earlier will have a direct impact on the pair as well.
