Major currencies treading water ahead of UK CPI

What Happened Yesterday
We had a very mellow start to the week with most majors currency pairs treading water within recent ranges.
The Kiwi was a standout bolter as it jumped from 0.6855 to eventually hit a high of 0.6930 after the announcement of Adrian Orr as the next RBNZ Governor.
Orr is widely regarded as a gifted and entertaining communicator, and he is certainly qualified. As well as top experience at the Reserve Bank he has presided over a decade of stellar performance at the NZ Super Fund.
The EUR and AUD both squeezed higher in thin trading whilst Sterling continued to drift lower in the lead up to the EU Summit.
Both the Yen & the CAD were largely unchanged.
Technical Set Up – What’s Happening with the Majors
Overall the USD was pretty steady which is a great way to start the week. We can now start to focus on short term momentum from this point.
AUDUSD
The Aussie is drifting sideways as expected. Keep an eye on tier 3 data today: NAB Business Confidence & Home Price Index, as they could provide a spark especially if they are weak.
NZDUSD
I’m expecting this recent ‘geopolitical’ rally to be short term. Watch the Aussie for short term direction.
USDJPY
The Beast continues to tread water. I still like it higher but that will depend on the FOMC and US CPI.
EURUSD
Perfect retracement back towards 1.1820 resistance. I think momentum will be choppy as we approach the EU Summit, ECB & FOMC meetings.
GBPUSD
A correction was overdue but that’s the hard thing about geopoloitical influences – when do they start and stop? Focus now turns to CPI today.
USDCHF
Consolidating around 0.9900 but hardly anything serious. Waiting for next major data for next leg of direction.
USDCAD
Steady as she goes despite Oil rally. I don’t think anyone really knows what to do with the Funds at the moment.
What’s the Plan for Today?
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The focus will be UK CPI but don’t forget there are a number of variables being released at the same time as well as ‘Brexit’ still hanging over the market.
The CPI could provide us with a short term trading opportunity but don’t fall in love with the position as it’s a long week with loads of data scheduled.
So I expect it to be a choppy week for GBPUSD & GBP Crosses in the lead up to the EU Summit.
Today’s Fundamental Drivers
The focus today will be on Sterling with UK CPI scheduled. This is the first of a number of major releases for the British Pound for the week and could potentially set the tone for Sterling, so make sure you check it out.
Today’s Focus – Major Currencies in Play
You need to follow the economic data releases & best technical set ups to work out where the majority of action and interest will be.
GBPUSD
Technical Set Up: Support @1.3330 & Resistance @1.3520
Fundamental Driver: UK CPI, PPI & RPI
Potential Strategy: Momentum is sketchy so I’d suggest trading with the CPI data. Downside stops lurk under 1.3330. Short term trade only.
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Plan the Trade, Trade the Plan!
The idea of our “Market Insight” is to give you some guidance into your daily preparation.
Make sure you don’t waste unnecessary time in front of the screens.
Remember you need to be fresh, confident and ready to trade and by sitting aimlessly in front of your screens you will become stale and uncertain.
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Brad