Chinese data weaker but in line with consensus
City Index July 13, 2012 1:00 PM
<p> EUR/USD Range: 1.2180-1.2215 Support: 1.2130 Resistance: 1.2325 The Euro continues to grind lower after making a fresh low yesterday at 1.2166 with the technical […]</p>
The Euro continues to grind lower after making a fresh low yesterday at 1.2166 with the technical picture looking ultimately at the June 2010 low of 1.1875 as we fail to rally above 1.2325. Rating agency Moody’s downgrading Italy’s sovereign debt rating by two notches to Baa2 from A3 which couldn’t have come at a worst time as Italy issue bonds today in various tenors. I’m expecting a quite range this morning 1.2150-1.2230 (at most) with JP Morgan results this afternoon along with US PPI and Michigan sentiment data I’m not ruling out a Friday the 13th squeeze to very short bearish Euro market.
Range: 1.5415 – 1.5445
Cable not immune to USD strength as the Queens currency retraces lower breaking the support at 1.5400 yesterday afternoon with the technical picture now looking for a test of recent lows at 1.5270. No UK data again today so I’m expecting the general $ theme to drive near term fortunes with EUR/GBP stuck 0.7875-0.7925 for the moment with exporters on the bid.
China’s Q2 GDP came in at 7.6% YOY, down from the 8.1% in Q1.Whilst it is the lowest reading since 2009 and below the consensus of 7.7% the outcome isn’t as mad as some had feared. The lifestyle currency had a relief rally on the back of a Chinese data being in line with expectations but failed to get back on a 1.0200 handle as we consolidate 1.0100-1.0200. I’m still bearish and will look to fade rallies to 1.0200 looking for a break 1.0045.
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