It smells of co ordination

EUR/USD
Range: 1.2270-1.2316
Support: 1.2250
Resistance: 1.2330

Whilst trying to evaluate how badly I called this market yesterday I tried to put into context Draghi’s comment yesterday ‘the ECB is ready to do whatever it takes to preserve the Euro. Believe me it will be enough’ the later reminding me of comments made by my parents in my youth that I initially dismissed only to be told a week later that my ticket for the upcoming Arsenal game had been given to my sister! I feel that the ECB now have to deliver after these comments and with all the traders I speak to saying ‘I just can’t buy it up here’ the market looks set to squeeze further. Technically 1.2330 is a huge level and we failed initially yesterday but the retracement is light with initial support now seen at 1.2250.

GBP/USD
Range: 1.5665 – 1.5702
Support: 1.5520
Resistance: 1.5750

Sterling like all other currencies in the G10 space consolidates at elevated levels following Draghi’s comment inspired a risk rally. I agree there is no fundamental reason to buy the queens currency confirmed by the release of GDP at -0.7 this week but 1.5450-1.5470 has held and we now look set to test 1.5750. I’m long risk and will add on a break of 1.5750 bar any contractions from the ECB president.

 
AUD/USD
Range: 1.0383-1.0442
Support: 1.0350
Resistance: 1.0450

The lifestyle currency benefits from both the risk rally and Central Bank diversification with the 1.0500 target now in sight. As mentioned it feels like Central Bankers are telling us they are ready to take action with media rumours in the US that FED are ready to pull the trigger on QE3 and the stark warning from ECB members that they will act to stop rising debt yields. All about the US GDP today with a consensus of 1.4% but get some rest this week-end as next week we have a busy calendar with the FOMC, ECB, and BoE oh and NFP.