Sterling rallies ahead of CPI data

May 17, 2016

After a slow start to the week, the pace of economic data increases with UK and US inflation data due for release. GBPUSD is making some steady gains in early trading ahead of the monthly inflation report while gold prices remained mixed in yesterday's trading. The EURUSD was subdued in yesterday’s trading, but that could change when the markets open today.

EURUSD Daily Analysis

EURUSD (1.13): EURUSD was little changed in yesterday's trading with the single currency finding support above 1.30. On the 4-hour chart, price action remains rather flat with in the process of forming a bullish divergence, which could see a possible move to 1.138 - 1.140 initially. Further upside above 1.140 looks bleak at this point unless price closes above 1.140 in which case, a move to 1.14975 is more possible. In the near term, EURUSD remains range bound within 1.1380 resistance and 1.12695 support.

USDJPY Daily Analysis

USDJPY (108.9): USDJPY is trading flat for five consecutive days with price action heading nowhere. Trading above 107.95 the bias remains to the upside for a move to 110.67 resistance to the upside ahead of 109.35 - 109.73 levels. On the 4-hour chart, USDJPY continues to show the bearish divergence which could see a correction towards 107.36 support.

GBPUSD Daily Analysis

GBPUSD (1.44): GBPUSD closed bullish yesterday and is already making some early gains having moved above 1.4425 level. Resistance is seen near 1.4535 which could cap the gains in the near term, but a move to 1.4635 cannot be ruled out. To the downside, 1.4312 - 1.43 remains the support level of interest.

Gold Daily Analysis

XAUUSD (1279): Gold closed in a doji yesterday after testing the highs above 1288. But with prices trading below the 1291 - 1289 resistance level, the bias remains to the downside. A break of the current support near 1273 - 1271 could see further downside in gold for a test of 1262 - 1258 levels ahead of the key 1250 support.

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