UK inflation holds steady at 3%, euro rallies

Top central bankers in focus

Will we see fireworks across financial markets today, as the world’s major central bank heavyweights make their way to the Central Bank Communications Conference in Frankfurt?

With Janet Yellen, Mark Carney, Mario Draghi, and Haruhiko Kuroda, all in the limelight, investors will be alert and are likely to closely scrutinize their speeches for clues on monetary policy. Any surprises or fresh insights from any of the top central bankers, could spark volatility in the currency markets.

Currency spotlight – EUR/USD

The euro roared back to life on Tuesday after positive economic data from Germany boosted sentiment towards the European economy and stimulated investor appetite for the euro.

With short-term bulls inspired by rising expectations over economic growth in Europe remaining strong, further upside may be on the cards. Taking a look at the technical picture, the EUR/USD still remains somewhat bearish on the daily charts. Although prices have broken above the 1.1730 level, buyers need to secure a close back above the 50 Simple Moving average to threaten the current daily bearish setup. A daily close above 1.1730 could open a path towards the 1.1850 resistance level, which could result in the EUR/USD finding itself back within a range. For bulls to be truly back into the game the 1.1850 level needs to be thoroughly conquered on the daily and weekly timeframe.

Page 2 of 2