Consolidation continues ahead of Bernanke
City Index August 30, 2012 2:30 PM
<p> EUR/USD Range: 1.2522-1.2561 Support: 1.2450 Resistance: 1.2450 The single currency opens in the middle of yesterday’s range of 1.2520-1.2570 at 1.2550 following an overnight […]</p>
The single currency opens in the middle of yesterday’s range of 1.2520-1.2570 at 1.2550 following an overnight opinion piece from ECB president Draghi where he states that the central bank need to ‘employ exceptional measures’. There were also positive euro comments from The Chinese premier Wen saying that ‘China will continue to invest in European debt’ added to this was an article in the WSJ from Angela Merkel where she states ‘eurozone has political will to revive confidence in the Euro’. I continue to trade the range 1.2450-1.2600 until the Jackson Hole tomorrow with a slight emphasis to fade a rally as I believe Bernanke will disappoint.
Range: 1.5819 – 1.5843
Sterling trades with a bid tone as we head towards the business end of the week and the month end rebalancing flow. The July consumer credit data and the mortgage lending data will be released today with the consensus being for £0.3 billion for the credit data with mortgage approvals expected to show a stronger number of 46k.The price action is constructive for the pound but with month end rebalancing expected in the EUR/GBP I’ll be cautiously looking to fade a cable move to 1.5900.
The AUD traded lower overnight but holding support at the 200-day moving average at 1.0312 as EUR/AUD touched 1.2150. The catalyst for the move seems to be soft commodity prices with iron ore falling further overnight along with weaker mining stocks and disappointing building approvals that declined to -17.3% from -5%.
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