UK CPI closely watched ahead of US Retail Sales

The Retail Sales figure released later today will definitely give traders insight on where the gloomy US economy is heading. Advance Retail Sales might be positive as it is backed by the high fuel prices rather than the rate of inflation. A positive figure therefore might spark a rally in the Greenback.

Due to the higher than expected PPI figure we saw in the UK yesterday, the expectations for the CPI figure which will be released today is higher across the board. If core inflation is higher than expected the Sterling can surge higher past the 1.9620/30 resistance level. Should the CPI be lower, investors can assume once again that the PPI figure did not indicate an aggressive inflationary surge and accompanied by weakness in the UK economy the BoE might still keep a relative dovish stance.

Herewith the Probability Studies of the Major Pairs for today:

EUR/USD – Bullish Trading Condition. The bearish Current Trend Resistance line (Blue line) has been violated and confirmed early in the US session yesterday and therefore the new bullish 60minute trend which indicates the daily direction of highest probability. We also have bullish hourly indicators and as price takes out new highs, ample scalping opportunities can present itself. We might have a great European session on our hands today.

GBP/USD – No Trade Zone. Price violated the bearish 60minute trend yesterday due to the higher than expected PPI figure yesterday but found significant resistance at the violated sideways Current Trend Support line (blue line) at 1.9635 which is now serious resistance. Should price move back into the ranges of the bearish 60minute trend, the bearish probability will resume. Keep a close eye on the UK CPI figure released at 08:30 GMT today as the impact could be volatile and far reaching

USD/CHF – Bearish Trading Condition. We saw some consolidation from a market rhythm perspective yesterday as the Swiss markets were closed. Nevertheless, we have a bearish 60minute trend and accompanied by bearish hourly indicators places the CHF in a bearish trading condition

USD/JPY – No Trade Zone within a Bearish Probability. The bullish 60minute trend has been violated in a consolidative manner, therefore the no trade zone. As soon as we see lower highs and lower lows, the hourly indicators will line up to the bearish side and then we will have a suitable bearish trading condition on our hands. Keep an eye out for the 104.75 resistance as it still resembles the violated support line of the previous Current Trend (blue line) , if we have a bullish breakout price can still head to this trendline to confirm the violation

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