Forex News: The release of the American Retail Sales didn’t create the expected strong movement but the week opened with a gap down which was mostly due to dovish comments made by Mario Draghi during the weekend.
During yesterday’s trading session the pair moved below the level located at 1.3830 but today we expect a move back up above this level and possibly an uptrend resumption. For the time being, Monday’s move lower is just a retracement and also a good place for more buyers to join the uptrend so our bias is bullish. A move below 1.3760 would severely weaken this uptrend and would put the bears in control.
The German ZEW Economic Sentiment will be the day’s main release for the Euro. Scheduled at 9:00 am GMT, the indicator is expected to decrease to a value of 45 from the previous 46.6, a fact which would most likely weaken the Euro and drive the pair lower. The US Consumer Price Index which is one of the main gauges of inflation will be released later in the day, at 12:30 pm GMT. The forecast is an increase to 1.4% from 1.1% and if it comes true, we will most likely see US Dollar strength and moves lower for the pair.
Yesterday’s trading session was rather slow, with the pair moving south during the first part of the day and climbing during the second. The pair had a high-to-low range of less than 50 pips and no special developments took place.
We anticipate an increase in traveled distance and stronger moves today. The bulls still have underlying strength so they are likely to take price above 1.6750, in an attempt to break the double top formed at 1.6822/20. To the down side, the first level of interest remains 1.6680 and a move below it would open the door for another break of 1.6600 support.
The main Pound-affecting event today is the release of United Kingdom’s Consumer Price Index which is scheduled at 8:30 am GMT. The CPI is closely watched by the Bank of England when the Interest Rate decision is made, hence the importance of this indicator. Higher than expected values usually strengthen the Pound and take the pair higher. Also, the pair’s direction will be affected by the release of the US Consumer Price Index.