European Stress test results to be announced at 5pm (London time)

City Index July 15, 2011 8:18 PM

<p>Impact of Bernanke’s comments on the S&P 500 Fed Chairman Ben Bernanke back-tracked his previous day’s comments on the possibility of QE3. “We are not […]</p>

Impact of Bernanke’s comments on the S&P 500

Fed Chairman Ben Bernanke back-tracked his previous day’s comments on the possibility of QE3. “We are not prepared at this point to take further action”. The S&P 500 followed Moody’s in placing the US on negative watch, citing the increasing risk of US policy stalemate and they even set a time limit of 90 days. The Obama administration used this latest warning to reiterate the need for Congress to ‘act to avoid default as President Obama becomes increasingly agitated with the lack of progress’.

EUR/USD

Range: 1.4095-1.4199

Support: 1.4050

Resistance: 1.4200

Today will be all about the results of the European Banks stress test. Now I’m not quite sure whether or not releasing these into the markets at 5pm London time is a smart thing to do as market liquidity will be at a premium. There are media reports today that 10 out of the 91 banks tested have failed the test, which requires at least 5% Tier 1 capital. Investors may look to trade the range and save energy for 5pm after a very long and volatile week for this pair.

GBP/USD

Range: 1.6134 – 1.6173

Support: 1.6105

Resistance 1.6200

Sterling is consolidating between 1.6100 and 1.6300 as focus on the market is not UK-related, with headlines from Europe and the US dominating proceedings. There is no data or speeches scheduled for today so for me trade, the breaks are at 1.6095 or 1.6205 as this pair will be dragged by US data and the results of the European stress tests.

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