Central Bank meetings will dominate with NFP’s Friday
City Index July 30, 2012 7:14 PM
<p> EUR/USD Range: 1.2272-1.2309 Support: 1.2230 Resistance: 1.2410 This week is all about the ECB meeting on Thursday where expectations are high that something is […]</p>
This week is all about the ECB meeting on Thursday where expectations are high that something is delivered following ECB president Draghi’s comments last week. The most likely outcome is a restart of the SMP programme with discussions centred on granting the ESM with a banking licence and hints that a further rate cut in September is likely. The Euro failed to close above the 1.2330-1.2335 on Friday after making high’s of 1.2390. I prefer to buy dips to 1.2200 for a test of 1.2410 as I just can’t see how the ECB can disappoint the market this week.
Range: 1.5710 – 1.5748
Sterling trades in summer ranges in Asia with the FX focus this weekly like to be away from the Olympic City. Today see’s the release of mortgage approvals and UK consumer confidence. The MPC meet on Thursday with the market consensus being that both monetary policies will remain unchanged with rates being left on hold at 0.5% and QE at £375 billion. Sterling trades with a bid tone especially against the Euro with some caution noted in cable as we failed to close last week above 1.5750.
The market is ignoring comments from Japan ‘prevent a strong JPY and deflation’ as the highlight for this pair will come from the FOMC meeting on Wednesday. If we see further hints from the FED that QE3 is close and a weaker US jobs report on Friday then I expect the BOJ’s resolve to be tested as a break of the June lows of 77.65 would increase the official rhetoric.
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