The CPI measures are to be published tomorrow, January 15, 2010. The Index measures the changes in the price of goods and services excluding food and energy.

The CPI measures price change from the perspective of the consumer.
It is a key way to measure changes in purchasing trends and inflation in the US.

A higher than expected reading should be taken as positive/bullish for the USD (as the common way to fight inflation is raising rates, which may attract foreign investment), while a lower than expected reading should be taken as negative/bearish for the USD.
Analysts predict a rise of 0.10% versus a previous reading of 0.00%.

Euro Dollar
The Euro broke the tight range to the upside, by breaking the resistance 1.4531, but did not reach further than 1.4577, stopping close to 38.2% Fibonacci resistance for the medium term (1.4569). But this break has improved the technical outlook, making us continue to wait for yesterday’s suggested targets, 1.4625 & the important 1.4678, but first we should see a break of 1.4569.

Short term support is at 1.4503, and breaking it would hurt the outlook for the short term to say the least, and could do more than that, because stopping close to Fibonacci 38.2% resistance for the medium term could provide a reversal point for this term (a minor possibility in our opinion). This break targets 1.4420 & 1.4359.

Support:
• 1.4503: short term support.
• 1.4420: Fibonacci 50% for the short term.
• 1.4359: previous well known support/resistance.

Resistance:
• 1.4569: Fibonacci 38.2% for the medium term.
• 1.4625: Nov 3rd low.
• 1.4678: Fibonacci 50% for the medium term.

USD/JPY
Dollar-Yen broke yesterday’s resistance 91.33 and came close to the suggested target 91.87. The question will be the same for today: will we see a bounce to the upside, or a continuation of the drop? Coming close to 91.87 means getting closer to the ideal target area for this bounce which is the area 91.87-92.59. The odds of stopping inside this area are high, and if this happens what will follow will be another leg down, targeting areas below Monday’s low 90.71.

Short term support is provided by the ascending line from this bottom in particular, which is currently at 91.54, and if broken, the odds of reaching a new weekly low will be good, and the targets will be 90.89 & 90.34. In case of a break of the resistance 91.87, we will be on the way to the most attractive target for this bounce 92.59 as a primary target, and if broken we will challenge the 93.20 top.

Support:
• 91.54: the rising trend line from Tuesday’s low on the hourly chart.
• 90.89: important intraday bottom.
• 90.34: support/resistance area on the hourly chart.

Resistance:
• 91.87: Fibonacci 38.2% for the whole move down from 93.75.
• 92.59: Fibonacci 61.8% for the whole move down from 93.75.
• 93.20: Jan 4th top.

Analysis by: http://www.Forexpros.com - Written by Munther Marjifor Forexpros

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