EUR/USD extends rebound to 1.1208 from 1.1100. Dollar index Off Wed 95.837 2 week high but up 2% on the week. Germany May IFO Business climate 108.5 vs previous 108.6. 108.3 expected. Germany May IFO Current conditions 114.3 vs previous 114.0 revised. 113.5 expected. Germany May IFO Expectations 103.0 vs previous 103.4 revised. 103.1 expected. UK April PSNB 6.038bln vs previous 6.060bln. 7.800bln expected. UK April PSNCR -4.044bln vs previous 21.595bln revised. IFO: Global economy not providing additional impulses, main driver remains domestic demand. ECB Draghi - Economic outlook for the euro area is brighter today than has been for 7 long years. Greek PM - Can soon reach a viable solution in talks with creditors. BOE Shafik: Main reason vote to hold rates was risk financial crisis effects more persistent. BoJ leaves policy unchanged, revises up assessment of the economy, both as expected. Kuroda sticks to timing of 2% inflation target. Economic Data Ahead (0830 ET/1230 GMT) US CPI (April) consensus +0.2% m/m, +0.1% y/y; previous +0.2% m/m, -0.1% y/y. (0830 ET/1230 GMT) US CPI ex food/energy (April) consensus +0.2% m/m, +1.7% y/y; previous +0.2% m/m, +1.8% y/y. (0830 ET/1230 GMT) US Real Earnings (April) previous -0.2% m/m. (1130 ET/1530 GMT) Cleveland Fed Median CPI (April) previous +0.2% m/m. Key Events Ahead (0945 ET/1345 GMT) US Fed Trade operation 30-year Fannie Mae / Freddie Mac (max $2.000 bn). (1300 ET/1700 GMT) US Fed Chair Yellen (voter, dove) speaks on the U.S. economic outlook; Providence, RI. (1400 ET/1800 GMT) SIFMA recommends early close. FX Recap EUR/USD is supported around 1.1200 levels and currently trading at 1.1189 levels. It has made intraday high at 1.1207 and low at 1.1099 levels. Today German Final GDP, IFO business climate came with flat numbers and Italy retail sales data released with negative numbers. Moreover, the euro gained further strength after a set of macroeconomic data from Germany showed improved prospects for the euro zone's largest economy. 1.1316 is an immediate resistance and a daily close below 1.1120 levels may drag the pair towards 1.1015 levels. Option expiries are at 1.1050 (632M), 1.1100 (907M), 1.1200 (1.4BLN). USD/JPY is trading at 120.83, having posted a daily high at 121.09 levels and low at 120.63 levels. The yen strengthened against the US dollar after the BOJ left its monetary policy unchanged, keeping rates on hold and asset purchases intact at the annual pace of 80 trn yen. Moreover, the BOJ statement delivered that the Japanese economy is recovering at a moderate pace and the QQE is having its intended effects. It also reiterated that the central bank will continue its accommodative policy as long as it is necessary in a bid to achieve 2% inflation target. On the top side, the next resistance is located at 121.60. Immediate support might be located at 120.56 levels. Option expiries are at 120.00 (2.5BLN), 120.50 (715M), 120.70-75 (410M). GBP/USD falls slightly, trading higher at $1.5646. It made an intraday high at 1.5689 and low at 1.5633 levels. UK calendar was very light as UK released Public Sector net borrowing data with positive numbers. The pair keeps the same range as traders remain on the side lines awaiting key speeches by the top central bankers while US CPI figures is also likely to emerge the main market mover later in the day. Immediate resistance is seen at 1.5751 and on the other side; support is seen at 1.5600 levels. Option expiry is at 1.5650 (454M). USD/CHF is trading downside around 0.9303 levels and made intraday low at 0.9285 and high at 0.9377 levels. Today was data free session for Switzerland. Near term support is seen at 0.9272 levels and resistance is seen at 0.9412 levels. AUD/USD is supported below 0.7900 levels and trading at 0.7886 levels. It has made intraday high at 0.7930 levels and low at 0.7882 levels. Today is data free session for Australia. Today US CPI as well as Core CPI data due later in a day will give further direction to the parity. Initial support is seen at 0.7860 and resistance at 0.7976 levels. Option expiries are at 0.7850 (617M), 0.7920 (1.25BLN), 0.8000 (1.2BLN).

Source