The expactations for CPI numbers this european afternoon are quite high with 7% (YoY). Of course that leaves room for disappointment and with respect to the price action of the last 24h (Dollar offered) the market does not really expect this number to be beaten. On the contrary, one must assume that the market is expecting a smaller number.
This mix of sentiment and price behavior makes it difficult to trade the numbers. The Dollar-Index is trading at the lower end of its recent 95.50/96.50 range. From a chart perspective the Dollar would leave the continuation pattern with a break through the 95.50 treshold. When that happens there is a lot of space down and a quick move of 1% lower or even more could be on the table.
EURUSD -- 1.1359
As already mentioned yesterday the Euro looks bid against the Dollar well supported above the 1.1270 mark. At time of writing the currency pair trades just ahead of the daily 50 ema (1.1371) and this important resistance might not hold this afternoon. The next resistance is dertermined by the descending trendline coming in around 1.1450 today. If the first reaction is bid in the pair I will try a short entry at the trendline with a tight stop above.
GBPUSD -- 1.3627
Sterling has left the bearish trend channel yesterday. I am not convinced yet of the breakout but I will not try to fade the move ahead of CPIs. The next real resistance is the upper Bollinger band (1.3701) and the 200 dma (1.3737). Above the 1.36 big figure the pair should be supported for now. If the pair is back inside the trend channel in a sustainable matter I will consider shorts again.
Good luck,
Sebbo