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After such strong PPI data on Tuesday, the market was anxiously awaiting to see if the strength of this number had filtered into the CPI. Whilst both the inflation and retail data came in better than expected, the CPI is still slightly below 2% – the target at which the Fed is focusing on, either way it is encouraging that it is going in the right direction. The dollar was a little choppy on the back of it as the greenback was able to strengthen against the commodity currencies but because of falling stock market and government yields the EUR and JPY strengthened against the dollar.
The EURUSD attempted another leg higher yesterday but found resistance at 1.1860 – a top side resistance that formed a couple weeks ago. The selling momentum was strong and the pair managed to trade as low as 1.1780. The sellers may have lost some of the momentum and I think that it may find some early morning support, but I think that the sellers may start building offers again at 1.1800 – this would be one of my preferred trades this morning.
The cable continues to be a difficult pair to trade, the pair traded as high as the 100 day MA at 1.3210 but found immediate selling pressure. We now see moving averages dictating the bulls and bears with the 100 day MA at 1.3115 acting as support and the 200 day MA at 1.3200 acting as resistance. I still hold my same strategy though, there is a lot of political pressure building on PM may and uncertainty around Brexit – I will use any break higher to look to sell the pair.
Market Insight Commentary – Forex
In the Zone
- EURUSD
- AUDUSD
- NZDUSD
- USDJPY
Market Insight Commentary – Indices
Important Economic Data out today
15:30 USD Unemployment Claims
Consensus: 235K
Effect: Lower than expected is good for the GBP
Noteworthy News
- Developments in Zimbabwe have not had an effect on the Rand yet, but it is a stark reminder of how things can change if we don’t look after our democratic constitution.
