17 May, AtoZForex, London – Bank of America Merrill Lynch along with Barclays Capital have shared BoAML US CPI forecast and Barclays Forex analysis for currency investors to acknowledge and benefit.
BoAML US CPI forecast
Consumer prices in the US have likely rose by 0.4% in April, notes Bank of America, pushing the yoy rate from 0.9% to 1.1%. The main driver was a 3.9% mom gain in energy prices. Meanwhile, food prices have likely rose at a more modest pace of 0.1%.
“Excluding and energy, core CPI likely rose by 0.2% mom, rebounding after weakness in March,” BoAML projected adding, “apparel prices may have snapped higher along with owners’ equivalent rent.” Lastly, yoy core inflation likely slowed to 2.1%.
Barclays Forex analysis
Kicking off, Barclays’ bearish Euro view was encouraged by the bearish close below support in the 1.1360 field. “Our next targets are towards the 1.1215 range lows and then lower towards 1.1125,” Barclays added.
Moving on, the investment bank is neutral on the Yen for now and looks for signs of a top to adopt a more bearish stance in line with its overall outlook for weaker USDJPY. The initial targets are towards 106.40 level and then 105.20.
Friday’s bearish close endorses Thursday’s formed small topping candle. “We look for a close below support near 1.4350, the 100 DMA, to encourage our bearish view towards 1.4300 and then 1.4170,” Barclays projected.
Turning to commodity currencies, Barclays is bearish on the Aussie and looks for a close below 0.7260 level, the 200 day MA, to confirm further downside towards greater targets near 0.7210 level and then 0.7045.
The investment bank has turned neutral on the Kiwi. Friday’s bearish close endorses the previous topping candle and signals further downside. “A break below 0.6715, the range lows, would make us more bearish towards targets near 0.6665 and then 0.6545,” Barclays added.
Finishing BoAML US CPI forecast and Barclays Forex analysis with the Loonie, unwinding momentum studies help to endorse Barclays’ bearish outlook. “We are looking for a move lower towards 1.2745 and then the 1.2460 lows,” Barclays finished.
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