Consolidation as euro breaks January highs
City Index February 8, 2012 1:00 PM
<p>EUR/USD Range: 1.3241-1.3288 Support: 1.3150 Resistance: 1.335 The euro held onto gains made in the US session yesterday as the market awaits the next development […]</p>
The euro held onto gains made in the US session yesterday as the market awaits the next development or headline in the Greek saga after headlines released late last night inspired confidence that the ‘ECB concessions will contribute to Greek debt reduction and the ECB is willing to exchange Greek bonds with EFSF.’ I have to say I’m not as confident as the market on a deal as Greece’s political elite still can’t agree between themselves whether the Troika’s terms are acceptable and with European heavyweights (Juncker) speculating on a Greek default I wonder if we are being prepared for such an event?’
Range: 1.0782 – 1.0833
The Australian dollar consolidated at the higher end of the range for most of the session as the market contemplates the technical resistance level at 1.0850. I expect the lifestyle currency to track euro and optimistic risk trade today with Japanese retail investors sticking with their yield return on AUD/JPY. Of note new RBA board member Heather Ridout was quoted on Bloomberg pledging to make the over-valued AUD a more prominent issue, referring to herself as a ‘growth girl’.
The JPY slipped to a 12-day low after weaker trade data and cross JPY buying took out the 77.00 resistance level. Even comments from Fed Chairman Ben Bernanke yesterday that 8.3% jobless rate understates labour market weakness wasn’t enough to deter the cross JPY yield hungry market with technical resistance taken out at 102.20 in EURO/JPY and 122.70 broken in GBP/JPY although 84.00 in AUD/JPY remains intact for the moment. With Japanese exporters looking to fade this move I expect 77.30 will be no easy level to break at the first attempt.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.