After the EUR made an all-time high of 1.6038 against the Greenback, we saw price retracing severely as Bernanke reiterated his concerns about rising inflation and the high price of oil. Evidently we saw oil also coming back by more than $7 in the mid US session as well. Today we have a string of fundamentals as well:

08:30 GMT – UK Unemployment Rate
09:00 GMT – Eurozone CPI
12:30 GMT – US CPI
13:00 GMT – US Net TIC Flows
13:15 GMT – US Industrial Production
17:00 GMT – US Housing Market Index
18:00 GMT – FOMC Meeting Minutes

If you have a look at all the above fundamentals, you will see that we will be in for a rough ride today. For a start we have the UK Unemployment rate and then the Eurozone CPI which is the most significant indicator for inflation and we all know that recent inflation data from the Eurozone has indicated a rise in inflation. Therefore, if the CPI is higher than consensus, we can see a renewed surge in the EUR. If it’s lower, then we might see the EUR pulling back even further from yesterday’s all-time high

Then we are thrown with US inflation data later – Bernanke confirmed yesterday that he is “concerned” about inflation – and then we have the FOMC minutes..Luckily we mainly focus on the technical climate of the EUR as we are chartists but it is always a good thing to at least have an idea of what to expect from a macroeconomic perspective

Herewith the Probability Studies for Today:

EUR/USD – Bearish Trading Condition. The more active bullish 60minute trend has been violated to the downside in the latter part of the US session yesterday and we now have a bearish probability. Although the 1 hour MACD is mixed, the bearish cross on the Stochastic has now given us a bearish trading condition. The key level to watch here is 1.5900 and then 1.5930. If price moves above 1.5900 we will most probably have a no trade zone within a current bearish probability and should price move above 1.5930/50, we will have a bullish trading condition once again. Watch this space!

GBP/USD – No Trade Zone within a Bullish Probability. Although we have a much more active bullish 60minute trend, the bullish probability remains intact and as soon as market rhythm starts to trend higher it will force the 1 hour indicators to cross bullish and give us a suitable bullish trading condition on the Cable

USD/JPY – No Trade Zone within a Bearish Probability. We saw the JPY make a low of 104.13 yesterday as price converged once again with the previous bearish violated Major Trend resistance line and therefore we identified a new, possible bullish Major Trend using the new higher trough. Nevertheless, the bearish probability is still active but price MUST move below the low of 104.13 to invalidate the violation of the previous Major Trend in order to give us a bearish trading condition. Therefore, watch the JPY closely before trading short as the next support is around 104.30 (due to the “dynamicness” of the new bullish Major Trend Support). If we see a bounce on these levels once again and price violates the bearish 60minute trend we will have a bullish probability.

USD/CHF – No Trade Zone within a Bearish Probability. The bearish 60minute trend is still intact and once the 1 hour indicators cross bearish, we will see a continuation of the great bearish trading condition we had yesterday. Should this no trade zone prevail by price trending higher from here on, we will have to wait for the bearish 60minute trend resistance line to be violated to the upside and confirmed before we will have a bullish probability

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