Eurozone data expected to weaken the euro further

Yesterday’s news was all about the UK inflation report, which made a big impact on the pound. With the pound already in a downward trend with previous poor data, the BoE has cut its wage growth data and this lessens the likelyhood of an early rate hike. After this announcement we see a whipsaw reaction as GBP/USD jumped to a high of 1.6842 as the jobless rate dropped to a six-year low, but was immediately sold off as the main news was that wage growth had been revised down for the first time since 2009. This in turn saw cable drop to make a three-month low of 1.6683. The pair has taken a break overnight as expected. With little out today to inspire, but with a lot of data due out from eurozone, we could see some better movement in the EUR/GBP market.

The euro is the main target today, with data releases. German GDP was already released  at -0.2%, weaker than the expected -0.1%. Also the French GDP was released at 0.0% with an expected 0.1%. So far there has not been much reaction by the euro from these figures as we get closer to the eurozone CPI year-on-year, expected at 0.4% the same as last. The Flash GDP quarter-on-quarter is expected to fall to 0.1% from the  previous 0.2%.

The ECB is set to release its monthly bulletin, explaining the reasons behind leaving rates unchanged and future economic conditions, with probably mentions of how the Russian crisis has affected the economy.

USD has gained against most currencies after weaker retail sales that got posted yesterday. This is mainly due to risk off trading as geopolitical tensions intensify the longer they go on.

Out of the US today unemployment claims are expected to creep up to 307k from the previous 289k.

USD has continued its gains against the yen as the safe haven bid reduces, with some rest between the Middle East fighting and Ukraine and Russia, but rest assured this has not gone away and is still a threat to all the markets.

EUR/USD

Supports 1.3330 1.3300 1.3260 | Resistance 1.3405 1.3450 1.3480

USD/JPY

Supports 102.25 102.10 101.90 | Resistance 102.60 102.70 102.90

GBP/USD

Supports 1.6630 1.6580 1.6475  | Resistance 1.6790 1.6900 1.6950

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