EU Session

GBP/USD: The British pound continued to get significant support around 1.5550, as yesterday the pair spiked up back to the 1.5600 area, while technical indicators remain negative across the board. Today the markets will be focusing on the inflation figures listed below, further shortfall in CPI and Core CPI will lead to further speculation that the BoE may continue with its policy by injecting more liquidity, and if inflation drops more than expected, then speculation will be even higher for a future rate cut. The GBP/USD down trend is likely to continue during the week, and the next obstacle support stands at 1.5550 followed by 1.5500.

Consumer Price Index: An index which measures the overall inflation of the consumer prices, lower CPI means lower inflation, which is lower interest rates and which is negative for currency.

Core CPI: An inflationary index but measures the change in the Core prices, but it has a slight impact on the markets during normal and abnormal market conditions.

Retail Price Index: Measures the change in the retail prices, it has a medium impact during the normal market condition and a significant impact during risk markets.

Euro Zone

EUR/USD: The European currency took a hit again and dropped during yesterday’s trading, reaching as low as 1.3161, and closed the day well below 1.3230 support area, while technical indicators remain negative ahead of German and EU ZEW economic sentiment listed in the economic calendar, in the meantime, those figures will have a significant impact on the markets; traders need to keep an eye on the internal component of these figures, especially the Current and the Expectations, worse than expected figures means that contraction signs continue, and the euro may drop further. The EUR/USD’s next obstacle support stands at 1.3155 followed by 1.3100.

ZEW Economic Sentiment: A composite index based on surveyed consumers, measures the economic health, and the most important component on this composite index is the current situation and the expectations.