Its Central Band week ahead of NFP’S as Chinese data beats consensus
City Index July 2, 2012 1:00 PM
<p> EUR/USD Range: 1.2610-1.2677 Support: 1.2400 Resistance: 1.2750 The market looks to be in a period of consolidation after the market digests the action from […]</p>
The market looks to be in a period of consolidation after the market digests the action from last week’s EU summit ahead of a busy week of data and central bank meetings with last week’s euphoria turning the euro into a buy dips scenario. Most analysts are predicting a move by the ECB this week to cut rates with 25 basis points already priced in by the market with some calling for a 50 basis point cut. Today we will receive the latest release of the EU PMI data and unemployment rate.
Range: 1.5648 – 1.5712
Sterling tracks risk slightly lower at the beginning of a week but I’m expecting a range bound market ahead of the BoE meeting this week. The pound lagged the EU summit risk inspired rally at the end of last week as negative UK banking developments weighed on the pound. The BoE is expected to announce an extension of QE by £25 billion with some calling for a larger £50 billion to be added following the June meeting where four members voted for an extension.
The JPY traded in a tight range despite a positive Tankan report which showed business sentiment, inventory perceptions, and capex forecasts and overseas demand all beating market expectations. After such a strong report and news of the DPJ break up following the departure of former president Ozawa The market has scaled back further BOJ easing with a hung parliament in Japan looking more likely. The release of The US ISM report will be scrutinised today ahead of the NFP data on Friday.
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