Euro Under Pressure Before CPI Data

The EUR/USD rose earlier in the morning but is now in decline. As the morning progress, the pair may continue on its current path until the ECB Monthly report comes out at 8:00 GMT. After that, European CPI data will come out at 9:00 GMT. Pay close attention to the numbers – the threat of deflation in Europe has been a constant source of anxiety for traders, and bad inflation data could exacerbate this. Also note that there is a lot of data coming out from America at 12:30 GMT, including the CPI and initial jobless claims numbers. Thus, there is a lot of information coming out today that could affect the pair. Look for support at 1.36880 and resistance at 1.3770.

The USD/JPY is climbing today in anticipation of US data later today. Earlier this morning, the yen gained due to better than expected Japanese GDP data. However, from a long term perspective, the Japanese currency is under downward pressure as the BoJ is trying to increase Japan’s inflation rate to 2% and is using quantitative easing to do so. Look for support at  101.60 and resistance at 102.40.