Euro hits 2012 lows as risk continues lower
City Index July 23, 2012 1:00 PM
<p> EUR/USD Range: 1.2084-1.2165 Support: 1.2050 Resistance: 1.2210 The Euro trades to a new low for 2012 hitting 1.2084 in early European trading following negative […]</p>
The Euro trades to a new low for 2012 hitting 1.2084 in early European trading following negative press releases over the week-end from Spain and Greece. The Euro’s woes continued with reports over the week-end that Greece cannot meet its obligations needed to secure the next tranche of bailout funds following on from reports that Catalonia and Valencia were to need emergency funding. The Euro area consumer confidence is released at 3pm with a reading of -20 expected but all eyes will be on European yields again as the market will focus on the 2010 low in EUR/USD of 1.1877.
Range: 1.5546 – 1.627
EUR/GBP starts the week again under pressure trading below 0.7800 giving cable a slight bid as the USD remains supportive in the G10 space as equity markets in Asia follow on from Friday’s declines. The main focus for sterling this week will be the preliminary estimate of G2 GDP on Wednesday. The consensus reading is for -0.2% with investors looking for a weaker number as a possible sign that more stimulus maybe needed from the BoE.
The lifestyle currency traded lower with the ‘Risk’ trade under pressure following European concerns this was despite the Australian Q2 PPI coming in above consensus at 0.5% although I don’t think it’s strong enough to move the RBA from a easing bias. After last week’s impressive rally I’m expecting a slight pull back for the AUD with the market positioning now a lot cleaner. Later in the week the CPI data will be released and I’ll be looking to take advantage of a weaker number to buy a 1.0200 dip looking for a break of 1.0380.
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