IMF says the JPY is overvalued from a medium term prospective

EUR/USD
Range: 1.2444-1.2507
Support: 1.2400
Resistance: 1.2600

The market continues to focus on the bad news with question marks remaining on the method used to help Spanish banks. Investors are becoming increasingly concerned on the state of the Italian economy with rumours gathering pace that Cyprus are close to asking for a bailout. It has been reported that European official are preparing for a worst case scenario following this week-ends Greek elections with measures such as maximum ATM withdrawals, imposing border checks and introducing capital controls. I’m looking for 1.2400-1.2600 range trading bar any earth shattering news.

GBP/USD
Range: 1.5462 – 1.5500
Support: 1.5400
Resistance: 1.5600

Sterling failed to achieve a 1.5600 handle after the initial risk rally was reversed in Europe and New York yesterday. MPC member Adam Posen admitted last night that he had been too optimistic when he switched his QE vote in April and that the need for private asset purchases by central banks had increased and that the UK economic recovery had ‘petered out’. At 9.30am today we will see the release of the UK industrial and manufacturing production with 0.2 and flat expected respectively.
USD/JPY
Range: 79.17-79.61
Support: 78.80
Resistance: 80.00

The JPY eased overnight following bearish comments from the IMF that the JPY is overvalued from a medium term prospective and that the IMF would understand intervention to weaken the JPY from the BOJ and that Japanese monetary policy should be eased further to increase their chance of achieving a rise in CPI to 1% by 2014. The market consensus is that the BOJ meeting this coming Friday ahead of the Greek election will provide no addition easing measured to Japanese monetary policy despite the IMF comments.