Euro pushes higher on renewed optimism ahead of FOMC minutes
City Index August 22, 2012 1:00 PM
<p> EUR/USD Range: 1.2448-1.2479 Support: 1.2400 Resistance: 1.2500 An article from Ambrose Evans-Prichard was the catalyst that has the euro shorts running for cover as […]</p>
An article from Ambrose Evans-Prichard was the catalyst that has the euro shorts running for cover as the world’s most prominent euro sceptic suggested that there are signs that Germany’s resistance to the ECB presidents bond buying solution could be weakening. EUR/AUD rallied above 1.1900 overnight and with continued support for yields, a move above 1.2000 can’t be ruled out squeezing shorts further. The FOMC minutes will be the highlight this evening but dips in prices remain shallow so far and so investors could test the resolve of the rumoured 1.2000-1.2500 double no touch option.
Range: 1.5765 – 1.5793
Sterling continues to trade with a bid tone despite poor public spending data yesterday that has seen the coalition government in the UK facing media criticism. There is no UK data today and as such some traders are expecting the pound sterling to continue to track the general US dollar move against the euro but with ‘cable’ closing above 1.5750 yesterday, the technical signs are somewhat encouraging for a potential test of 1.5850 level ahead of the UK GDP release on Friday.
The lifestyle currency was the biggest loser overnight as EUR/AUD shorts had more pain inflicted on them as the pair rose above 1.1900 with market rumours of more stops above 1.2000. The AUD demise wasn’t helped when BHP reported a 35% fall in full year profits and on news that they are poised to put on hold their Olympic Dam expansion project although my equities colleagues tell me this isn’t really a secret. It looks like the EUR/AUD flows will dominate the direction of this pair until the release of the Chinese PMI data tomorrow.
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