FX traders brace themselves for the Greek election with BTP auction and US CPI today’s distraction

<p>EUR/USD Range: 1.2553-1.2588 Support: 1.2450 Resistance: 1.2650 The single currency continues to trade in tight ranges ahead of the Greek election with last night’s announcement […]</p>

EUR/USD
Range: 1.2553-1.2588
Support: 1.2450
Resistance: 1.2650

The single currency continues to trade in tight ranges ahead of the Greek election with last night’s announcement from Moody’s that they are downgrading Spanish Government bonds by three notches and Cypriot Government bonds by two notches failing to get a significant reaction in FX space. Yesterday I predicted some position squaring ahead of the Greek election so with a 1.2600 handle achieved I believe 1.2450-1.2650 will continue ahead of the week-end. Italy will try to auction Euro 4Billion in the three year tenor today at 9am with the market expecting a rise in yields to 5% from 3.9%.

GBP/USD
Range: 1.5505 – 1.5531
Support: 1.5400
Resistance: 1.5600

Cable fails again to establish a 1.5600 handle despite yesterday stop induced $ demise as we continue to trade a 1.54-1.56 range ahead of the week-end main event for FX markets. There is speculation the BoE will add addition stimulus in the near future after the UK chancellor commented that the BoE is poised to announce a new strategy to ease credit conditions which could be revealed as early as the Mansion House dinner this evening.
AUD/USD
Range: 0.9931-0.9966
Support: 0.9850
Resistance: 1.0050

Very little to add for the lifestyle currency with the 0.9850-1.0050 range looking firmly in place but with the US data deteriorating the calls for further QE in the US is starting to gather pace. This afternoon we will get further evidence of the US economy after a weaker retail sales number yesterday the release of US CPI data is up today with a headline number of -0.2 expected.

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