Today's overview and forecast of EUR/USD, GBP/USD, USD/JPY, FTSE, Dow, Dax, gold and oil

EUR/USD

Failure to break the resistance at 1.2170 after several attempts triggered a modest phase of selling that pushed EURUSD below the 50-period SMA. However, the trend remains to the upside, in line with the RSI value pointing higher after nearly closing in on the oversold space, with a push beyond 1.2150 to indicate the presence of buyers ahead of US inflation data due later today.

GBP/USD

Key stats released this morning showed UK Q1 GDP declined by 1.5% versus 1.6% expected. However, Industrial Production increased by 1.8% and Manufacturing increased by 2.1% prompting the British Pound to rally slightly. But resistance at 1.4150 / 70 remains strong, in addition to movement from the RSI pointing to the downside, signaling weak momentum in the short-term. Our target however remains the 1.42 figure ahead of the release of US inflation data which will surely have material impact on GBPUSD.

USD/JPY

USDJPY pulled back to our support at ¥108.50 flipped and turned back up, in an attempt to regain positive traction as it seems that traders are buying the US Dollar ahead of the CPI report However, the lack of follow through and the RSI pointing to the downside, indicate a fading momentum.

FTSE 100

The FTSE100 hit our support target at 6890 as forecasted, as stocks worldwide tumbled over inflation fears. However, the UK benchmark bounced back up slightly in early morning trade following strong economic figures from the UK, and as the RSI closed in on the oversold space. Looking ahead, US inflation data due later is in focus with a break above the 50-period SMA needed for the Footsie to pivot back to bullish, otherwise stocks in London are expected to sink further today.

Dow Jones

The Dow Jones dropped lower for a second consecutive day as investors are starting to worry about the recent sustained rise in commodities prices which may lead to a sharper rise in inflation in the coming months. The index breached 34575 support - now turned resistance - triggering an accelerated slide below the 200-period SMA although 34000 provided support. If the CPI report, coming out of the US later is higher than the 3.6% expected, this will surely trigger more weakness in global equity markets.

DAX 30

A lower high on the daily chart now confirmed on the Dax-30, losing more than 1.25% in yesterday’s session, while still holding above key 15000 handle. Solid earnings are keeping the index supported in early trade today, while a rise in risk-off sentiment weighed down on travel and tech stocks. 15000-15200 support/resistance trading range need to be breached for a clearer direction, with downside looking more favorable.

Gold

Inflation concerns continue to drive markets, spurring a sell-off in equity markets as US10Y yields climbed back above 1.60%. All eyes today on US CPI data for a latest gauge on inflation, while expectations of no tapering and a steadfast Federal Reserve remain the major consensus. $1840 key resistance level needed to be breached to open the door to further upside with $1850 and $1860 as next targets in extension.

US Oil

WTI Crude oil managed to end yesterday’s session slightly in the green, boosted by a strong demand outlook by OPEC along with a drawdown in US API inventory in addition to the tensions in the Middle East. Focus shifts on official EIA data expected today, with drawdown expectations standing at -2.25Mb. Technically, an hourly close above $65.50 resistance level will favor further upside with $66.60 as next resistance target.