EU Summit sends a positive message but it’s not the Bazooka

<p>EUR/USD Range: 1.2431-1.2629 Support: 1.2400 Resistance: 1.2700 Positive news from the EU summit buoyed risk overnight seeing the single currency rally 200 points to 1.2629 […]</p>

EURUSD

EUR/USD

Range: 1.2431-1.2629
Support: 1.2400
Resistance: 1.2700
Positive news from the EU summit buoyed risk overnight seeing the single currency rally 200 points to 1.2629 as headlines hit the wires catching a pessimistic market on the back foot. In my opinion the statement still lacks substance and it now remains to be seen how long it takes to implement the measures. It was a bad night for the Germans all round with Chancellor Merkel surprisingly quite on her hard line approach may be tempered with losing to the Italians? I’m not convinced by the rally but I’m wary of the month end rebalancing flow today and will be patient to trade the 1.2450-1.2650 range.
GBP USD

GBP/USD

Range: 1.5508 – 1.5648
Support: 1.5500
Resistance: 1.5700
Sterling takes its lead from the Euro and with general risk positive sentiment following the statement from European Council President Van Rompuy cable trades towards the high end of the weeks range. EUR/GBP rallied 90 points on the announcement triggering stops through 0.8050 but with no UK data and only US personal spending numbers and Chicago PMI data this afternoon I expect the month end re-balancing data to dominate the Queens currency.

 

Summary of EU headlines

  • Van Rompuy: eurozone reaffirms commitment to use EFSF and ESM flexibly and efficiently to stabilise markets
  • Euro leaders open bailout funds for governments meeting conditions
  • Euro leaders agree to open funds without austerity programs
  • Van Rompuy: ECB to act as agent for rescue funds in operations
  • Banks can recapped directly with aid funds
  • Euro finance ministers to enact deal at July 9 meeting

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