The Core Inflation data coming out of the US. is not expected to impact markets to a significant degree. The consensus is for a static trend (see graph below) of 1.7%, as had been seen over October and November of last year. As such the data is in all probability already priced into the market.
Rate
USD/CHF
In the markets the USD/CHF is rising in and upward channel and will continue to do so, breaching present resistance at 0.90871 and continuing upwards. If U.S. inflation data surprises us on the downside then this pair may retrace to 0.90565 (61.8 Fibonacci).
USD/JPY
A drop in the USD has been followed by a strong upward move.
If U.S. inflation data holds no surprises expect a continued upward trend for the long trade but with resistance met at or around previous high of 105.026, for psychological reasons. Support will be found, if 105.026 mark tested, at around 104.670; again reflecting previous open and close highs.
EUR/USD
A precipitous fall in the EUR continues at the time of writing. An expected data set from the U.S. on inflation may not be registered too much as the EUR hits 1.35944 and, if breaks through, continues to the 1.35646 level of previous lows. Only an unexpectedly high inflation figure from the U.S. will rescue the EUR in the near future. This is an unexpected and improbable occurrence.
GBP/USD
The USD is in ascent at the moment and is expected to continue so, if inflation data (U.S.) turns out as expected.
Look for support at the 1.63303 level and a channel developing thereafter as the market awaits further news. The support level for this channel may come in at 1.63584 and resistance at 1.64552.
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