Euro rally short lived as Spanish banking woes keep pressure on the 1.2500 level
City Index May 29, 2012 1:00 PM
<p>EUR/USD Range: 1.2510-1.2549 Support: 1.2480 Resistance: 1.2680 The mini rally seen in the single currency on the open this week after the latest Greek election […]</p>
The mini rally seen in the single currency on the open this week after the latest Greek election poll ran out of steam above 1.2620 yesterday as the market focused on the Spanish banking woes and the 19 billion Euro’s needed to bail out BFA-Bankia. Spanish PM Rajoy tried to calm the markets with comments that his county does not need any international rescue for its banks although he did admit Spain was finding it difficult to finance itself. He blamed the soaring borrowing cost on the advancing debt crisis in the eurozone and he wants the ESM to be allowed to lend directly to banks.
Range: 1.5655 – 1.5683
Sterling tracks the euro lower in holiday trading with EUR/GBP now trading back below 0.8000 (GBP/EUR 1.2500). With no UK data of substance today I’d expect cable to track the fortunes of EUR/USD and with a notable weaker trend in risk I’ll expect rallies to 1.5750 to be sold with a break of 1.5600 needed for my 1.5500-1.5520 target support. The UK CBI retail survey results are released at 11am this morning.
USD/JPY trades in the middle of the 79.30/80 range we have seen this week following positive data released in Japan overnight. The retail sales number recorded a positive reading of 5.8% following the rise of 10.8% seen last month although the jobless rate in Japan did creep up to 4.6% from 4.5% last month. The market will look for the latest signs on the US economy today with the release of consumer confidence sentiment at 3pm with a reading of 72 expected up from 69.2 last month.
GAIN Capital UK Limited (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.