FOREX NEWS: INFLATION DATA CLOSELY WATCHED AS THE ECB RATE DECISION APPROACHESEUR/USD
Forex News: The Euro was affected yesterday by a worse than expected German Consumer Price Index while the US Dollar benefited from a slightly better Manufacturing PMI, facts which triggered a slow but bearish day.Technical Outlook
For the time being 1.3650 resistance is holding as seen from yesterday’s bounce lower. The pair continues to have a small range but we are still favoring moves to the downside and a break of 1.3585 en route to 1.3560. It seems like market participants are waiting for the ECB decision regarding the Interest Rate and maybe until it is released, we will not see strong, unidirectional movement.Fundamental Outlook
Euro Zone’s Consumer Price Index is released today at 09:00 am GMT and it could be the only reason for increased volatility. As mentioned on other occasions, the ECB is closely watching inflation levels as they are highly correlated with the Interest Rate decision. Today’s forecast is 0.7%, no change from the previous value but a higher number will most likely be beneficial for the Euro.GBP/USD
United Kingdom’s Manufacturing PMI showed a value that came close to analysts’ forecast and the impact on the pair was light but price traveled below 1.6750 nonetheless.Technical Outlook
Yesterday’s price action was sluggish but some bearish pressure can be seen through the fact that 1.6750 was broken again. This shows that bulls cannot sustain higher prices and that bears might continue downwards price action, with the first target being 1.6680. However, today’s direction might be affected more than usual by British economic data.Fundamental Outlook
At 8:30 am GMT the British Construction PMI is announced and it’s expected to increase from 60.8 to 61.2. The indicator is based on the opinion of about 170 purchasing managers from the Construction sector and acts as a leading sign of optimism and economic health so better than expected numbers are beneficial for the Pound.