US dollar rose as core inflation gained 0.2% (vs. +0.1% expected), while durable goods orders rose by 2.8% after falling by 3.3% in the previous period. Despite the negative headline inflation (-0.7%), the expectations of the Fed’s June rate hike are back. On Friday the US will release the second estimate of Q4 GDP (a revision down from 2.6% to 2.1% is expected).
EUR/USD is below 1.1260. Next levels to watch are 1.1210 and 1.1100. Resistance has switched to 1.1280 and 1.1350.
GBP/USD has tested another high at 1.5550 supported by the decline of EUR/GBP, but then fell on stronger USD. A band of resistance is located at 1.5580/1.5600/1.5620. Support is at 1.5420/00 and then at 1.5400.
USD/JPY will likely be sold on approaches to 119.60. Next resistance is at 120.00. Japan will release a bloc of the economic data on Friday during the Asian session. Forecasts are not very positive, but the Bank of Japan has signaled that it wants to wait with further stimulus, so the negative impact on yen shouldn’t be big. Support is at 118.80 and in the 118.30 area.
AUD/USD is trying to push above 0.7900, but the 200-period MA at H4 chart is a serious obstacle which has been capping the pair foe many months. Support is at 0.7770 and 0.7720. Resistance is at 0.7950 and 0.8025. The risk of the RBA’s rate cut next week will limit Aussie’s advance.