CPI data from the UK and US will be in focus today, but sterling has already come under significant pressure, while USD/JPY continues its ascent. 

Euro and US dollar notes
Source: Bloomberg

GBP/USD set for losses

Having opened below $1.52 this morning, it looks like we are set for more losses in this pair, assuming UK CPI this morning does not have a surprise up its sleeve. The failure to hold gains around $1.52 means that we now look to support around $1.5155, and then $1.5130, with a move through here potentially taking the pair as far as $1.5050. It would require a fairly strong inflation number to put the bulls back in control here, with a target around $1.5225 in the first instance and then on to $1.5270. 

EUR/USD could return to 2015 lows

The move through $1.07 still needs a daily close below this level, but the continued bearish pressure on the euro, and the failure to hold any gains yesterday, does suggest we will see a move back towards the 2015 lows around $1.0470. Bearish momentum is likely to persist unless and until we have a close back above $1.0820. 

AUD/USD sellers remain in control

The descending channel remains in effect here, so unless we have a move through Friday’s highs around $0.7160 the sellers seem to have the upper hand. Further downward progress is likely to run into support around the $0.7050 and then $0.7018 levels, with a drop through the latter clearing the way to a test of the bottom end of the descending channel, around $0.6950, putting AUD/USD on course to test the September lows. 

USD/JPY targets ¥123.50

The October uptrend continues here, with a bounce yesterday putting the pair back on course for the ¥123.50 area that saw gains peter out early in November. A break through here targets ¥124 and then the June highs near ¥126. If the trendline is broken then we look towards support at ¥121.93 and then ¥121.57. 

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