US Dollar Finds Support on Risk Reversal, GBP/USD off Five-Year High Ahead of UK Inflation Data

Dollar traded slightly stronger on 17 June as riskier assets such as equities traded lower on account of heightened civil unrest in Iraq and as border tensions in Ukraine held oil prices near recent highs, increasing concerns about the global economic recovery.

UK consumer price and factory gate inflation data for May and Germany ZEW survey for June are the important releases in the European session on Tuesday, ahead of the US CPI inflation and housing starts.

GBP/USD eased to as low as 1.6957 after hitting a fresh 5-year high of 1.7010 in Monday's Asian session. The pair closed Monday near 1.6982.

It has supports at 1.6844 and 1.6692 ahead of 1.6459 and 1.6251. A break of that will destabilise the higher-lows-steady-highs pattern from March 2009.

On the higher side, the level to watch above Monday's peak of 1.7010 is 1.7045 and then comes 1.7443.

EUR/USD closed Monday at 1.3572 after trading as low as 1.3512. On Tuesday the pair eased to 1.3559. It has supports at 1.3478 and 1.3595 and resistances at 1.3992 ahead of 1.4244.

USD/CHF edged higher to 0.8986 from 0.8969 at Monday's close. It has resistances at 0.9036 and then at 0.9155, a break of which can destabilise the downtrend since July last year. Supports are 0.8907 and 0.8799 ahead of 0.8703.

USD/JPY moved from 101.82 at Monday's close to 102.06 on Tuesday. It has resistances at the 102.80-103.0 region ahead of 104.12, a break of which will take the pair back to the steep uptrend since 2012.

On the downside, the next important level is 97.62, the break of which will expose 92.68. Below that, it will prove a reversal of the uptrend since 2012.