Session recap: US CPI was the focus

By FXstreet.com | Updated July 30, 2014 AAA

FXStreet (Guatemala) - The US market was dominated by the forthcoming FOMC tomorrow.

However, markets have likely priced in the intentions to reduce the pace of monthly asset purchases by $10B to $35B. But, given the CPI numbers, markets will however be listening closely to Yellen’s new set of quarterly forecasts for inflation.

GBP/USD has been holding onto the 1.69 handle despite offers in London on the inflation disappointments. 1.6950 has been the main support level in the U.S. session and again we are holding out for the FOMC to get this fire started again with 1.70 / 1.71 still on the horizon in the bull’s opinion.

USD/JPY has been trying to recover but has been held up in a 10-pip range on the 102 handle between 102.10 and 102.20 since the rally from 101.95 area and 100 SMA. Valeria Bednarik, Chief analyst at FXStreet explained that some follow through pass 102.35 is required to confirm a stronger advance, looking for a test of the 102.80 price zone.

EUR/USD has been on the back foot since its rally towards the 1.36 level and making a score of 1.3588. Once again, we are awaiting the FOMC and traders will be ears on Yellen listening for whether there are opportunities for a test higher again on hawkish comments.

Key Events:

US May CPI rises higher than forcatsed

US housing starts fall

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