EUR/USD: Euro on hold awaiting US inflation data
(Vasilis Tsaprounis – TopFX)
In a narrow range of fluctuation in the area of 1,0150 the common European currency trades against the dollar awaiting important data on the course of inflation in the US economy.
After the significant rise during yesterday where the pair tested the 1,02 level the upward momentum weakened, gains have been limited and the market is now on hold.
The inflation pressures in the German economy although they remain at high levels show signs of stabilization as the morning data showed, confirming the recent assessment that the recent lower oil prices will help to stabilize inflation in the eurozone.
At the same time, the positive sentiment that has returned to the stock markets limits the need to buy dollars as a safe haven currency, with the consequence that the US currency has limited the gains of the last few days in relation to all the main pairs.
Price inflation forecasts in US show some decompression, consequently, investors await with particular interest the exact figures later in the day.
Although several analysts expect the Fed’s rytoric to be limited in relation to intentions for future rate hikes, it may be too early to draw such conclusions.
We maintain a waiting attitude for the rest of the day and until the announcement of the data. Without any significant surprise regarding the announcement of very low prices in relation to the forecasts we would hardly see a new strong upward movement of the euro.
Ichimoku cloud analysis: GBP/USD, USD/CAD, NZD/USD
GBP/USD, “Great Britain Pound vs US Dollar”
The pair is testing the upper border of the Cloud. The quotes are above the Cloud, which indicates an uptrend. A test of the lower border of the Cloud at 1.1510 is expected, followed by growth to 1.2025. One more signal confirming the growth will be a bounce off the upper border of the bearish channel. The scenario can be cancelled by a breakaway of the lower border of the Cloud and securing under 1.1445, which will mean further falling to 1.1355.
USD/CAD, “US Dollar vs Canadian Dollar”
The pair is pushing off the Tenkan-Sen line, going under the Ichimoku Cloud, which means the prevalence of a downtrend. A test of the lower border of the Cloud is expected at 1.3040, followed by falling to 1.2765. An additional signal confirming the decline will be a bounce off the upper border of the descending channel. The scenario can be cancelled by a breakaway of the upper border of the Cloud and securing above 1.3175, which will entail further growth to 1.3265.
NZD/USD, “New Zealand Dollar vs US Dollar”
The pair is getting ready to break through the Cloud. The pair is going inside the Cloud, indicating a flat. A test of the lower border of the Cloud is expected at 0.6075, followed by growth to 0.6295. Growth of the pair will be signaled by a bounce off the upper border of the descending channel. The scenario can be cancelled by a breakaway of the lower border of the Cloud and securing under 0.6020, which will entail further falling to 0.5925.