USD strengthens as we await Yellen’s testimony

<p>The euro is having a more settled start this week with a offered tone to its trading, as we wait for more details in regards […]</p>

The euro is having a more settled start this week with a offered tone to its trading, as we wait for more details in regards to the Greece bailout extensions. The latest news from Greece is that the reform plans have been received by the Eurogroup and will wait for the approval stamp.

EUR/USD is currently trading above the 1.1300 handle as the euro has a busy day ahead, with the EU CPI data release expected unchanged at -0.6%. The ECB’s President Draghi is also speaking and as usual will cause some volatility to the trading.

Out from the UK we have the inflation report hearings, where the BoE Governor and the MPC members will talk about the inflation and economic outlooks. This  will likely shape up the direction of sterling, which of late has enjoyed some strength from the weakness of the Euro. Currently, the GBP/USD is trading below the 1.5450 level with 1.55 a key breakout level.

USD/JPY has settled again above 119.00 as the dollar strengthens on preparation of the Yellen testimony today. Most reports suggest that a ‘don’t rock the boat’ approach will be used by the FED Chair, but the key points will be any mention of keeping or dropping the ‘Patience’ wording in the FOMC statement and any indication they will be raising rates within this year.

New Zealand sees a big drop in its currency overnight and the inflation expectations start to follow suit as the global economy prepares for drops due to the oil price. In the Asian session, we will be hearing from the RBNZ Governor and  there’s likely to be volatility as traders try to determine if rates will be cut due to the ease in inflation.

 

 

EUR/USD
Supports
 1.1280-1.1230-1.1170  | Resistance 1.1390-1.1450-1.1500

 

 

USD/JPY
Supports  
118.60-118.40-118.00 | Resistance 119.20-119.60-119.80

 

 

GBP/USD
Supports 
1.5370-1.5280-1.5220 | Resistance 1.5510-1.5570-1.5660

 

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.