European finance ministers meeting today after tepid US jobs data on Friday

EUR/USD

Range: 1.2235-1.2308
Support: 1.2150
Resistance: 1.2450

The single currency still trades under pressure after breaking the 2012 of 1.2280 late on Friday with the technical picture showing an oversold market. The EU finance ministers meeting today will follow up on the decisions taken by the EU summit, in particular the establishment of the ECB as a single euro area bank supervisor. While the intention was also to determine the MoU for the Spanish bank recapitalisation, this may need to be done at a further Euro group meeting later in July. There isn’t much good news out there to support the single currency so I’ll be using any EU meeting positives to add to Euro shorts.

GBP/USD

Range: 1.5465 – 1.5495
Support: 1.5380
Resistance: 1.5630

The European finance ministers meeting in Brussels will be the highlight today along with BOE deputy governor Paul Tucker giving evidence to the TSC Libor fixing inquiry. Macro data is light this week in the UK with only industrial/manufacturing production and the trade balance scheduled to be released. Risk sentiment is weak following weaker Chinese inflation and a tepid US jobs report. Risk sentiment will continue to drive sterling this week.

AUD/USD

Range: 1.0177-1.0211
Support: 0.9970
Resistance: 1.0330

The lifestyle currency traded lower with general risk sentiment weaker following the release of the Chinese CPI data that was slightly below the consensus forecast of 2.3% at 2.25%. China’s Premier Wen Jiabao said the downward pressure on the economy is still “relatively large” and added that the government will intensify fine-tuning of policy in response to the downside risk to growth. The AUD trades lower this morning but with a yield advantage I’m still expecting EUR/AUD flows to dominate.