Waiting for US CPI data

Europe and Great Britain CPI data has been released. Although British CPI was slightly lower than expected British Pound fell across the board, particularly against commodity currencies. It is consolidating now, but in the wake of tomorrow’s data (Bank of England minutes) we can expect Pound weakness to continue. This week is full of CPI releases. Markets are now positioning themselves for US CPI that is to be released at 12:30 GMT today. From current technical action you can see that traders are bearish towards US dollar and are expecting negative data from United States. 

One can even see sort of a rounding base in eur/usd after correcting from 1.3200 highs that was reached after Ben Bernanke’s speech regarding economy, interest rates and ending of stimulation process. Since the sentiment for US dollar is bearish the data has to be much better than expected in order to stop the greenback from falling. If it simply meets the expectations you should not be surprised to see dollar continuing on its’ downtrend path. This should also be reflected in eur/gbp rise and gbp/chf fall. There is pretty good correlation among the above mentioned pairs. I keep on selling Pound and US dollar at the moment.

Forex news from Europe and Canada

We have two very important pieces of news ahead of us today. The first piece is coming from Europe and that is German Consumer Price Index data (CPI). Europe has been showing very poor results economic results lately and this inflation number might cause strong decline in Euro pairs. If the news is worse than expected Euro weakness will definitely spill to Swiss Franc pairs too. I am looking for possibilities to short eur/gbp if the market starts moving the pair down. The release is scheduled at 12:00 GMT. 

The second piece of news comes from Canada and that is Canada Gross Domestic Product. Expectations are weaker than last month, but as veteran traders say: ‘buy the rumor and sell the fact’. We might reverse the saying. The number might be much better than expected. Then, CAD would rise. I am currently looking at aud/cad currency pair and see that it has formed a nice bearish technical structure. It means I am considering selling the pair if the news pushes it below current support price level of 0.9675. However, Canadian dollar looks a bit weak against other European currencies. So, I am going to place a very small order for selling. 

Let’s wait and see what the future brings.