May the 19th 2021
Euro Zone CPI for April will be released today, market expectation is for headline inflation to be 1.6%, up from 1.3% the previous month. This is still below the ECB target of 2%, but the EUR Bullish market will take comfort that it’s going in the right direction.
EURUSD
The EUR has tried a number of times to break the upside at 1.2230/40 without much luck so far. However corrections have been very shallow.
Ahead of EZ CPI I would expect dips to be bought with support now found below 1.2200 at 1.2170/80.
If 1.2240 breaks the next areas of resistance is 1.2280 and 1.2320 in extension.
EURJPY
EURJPY continues to probe at the upside but has run into resistance in the 133.40/50 area.
Although the trend is up, the cross is looking a little overbought this morning. I would not be surprised to see a small correction back to 132.60 support.
However, if resistance is cleared out at 133.40 the next area of resistance will be found at 133.90 and 134.30.
EURGBP
Range trading between strong support at 0.8580/70 and Resistance at 0.8620/30.
I am not sure today’s CPI releases will break this range unless they miss expectations by a long way. The fact that the UK CPI comes out 3 hours before the EZ may make a difference in price action.
If the support is broken at 0.8580 then we will take a run at 0.8540. However, if resistance at 0.8630 is broken I would look for 0.8670/80.
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