Forex News: Euro Zone’s Consumer Price Index came out as expected, with a value of 0.5% and the US Building Permits didn’t post a surprise either. As a result, the pair lacked clear direction yesterday and price moved above and below 1.3830.
The bulls tried to take the pair above 1.3830 but the move was almost immediately reversed, a fact which shows underlying bear strength. However, once price moved below 1.3830, it just remained there and no strong moves occurred. This indicates that indecision is present in the market and almost anything can happen until a clear move is made by either bulls or bears. Our bias is neutral at the moment, in anticipation of a clear display of power from either side. The levels to watch are 1.3900 as resistance and 1.3760 as support.
The day’s most important events come from the US today: the Unemployment Claims are released at 12:30 pm GMT and anticipated to increase to 316K from last week’s 300K. A higher level of unemployment is detrimental to the US economy and to the US Dollar but the impact of the indicator is not consistent, mostly because it is released every week. The second economic release is the Philly Fed Manufacturing Index which is a leading indicator of economic health focused on manufacturing performance in the Philadelphia district. Higher numbers than today’s anticipated 9.6 usually strengthen the greenback, driving the pair lower.
Yesterday the Pound scored another victory versus the US Dollar on the back of a better than expected value of Unemployment Rate. As a result, the pair broke 1.6750 resistance and touched 1.6820 again.
Price touched the resistance zone formed around 1.6820 for the third time, creating a Triple Top, which is a bearish pattern and is usually seen at the end of an uptrend. This is a major sign that moves south will follow if this triple top cannot be broken soon. The first level that can offer support is 1.6750 but we might also experience a ranging day because no major news releases are scheduled for the Pound.
Market participants will shift their attention towards the US for the releases mentioned above since the United Kingdom didn’t schedule any news for today. The approaching of the Easter holidays may generate irregular movement and possibly increased volatility.