Markets in tight range US home sales data expected to improve

The markets have been trading in very tight ranges this week thus far. Traders are waiting for the next big announcement, which is likely to be the Eurozone CPI, not out until Monday, June 30th.

For now we are running on comments and little data, with BoJ’s Kuroda pre-emptively playing down an inflation speed bump. This has kept USD/JPY stuck around the 102.00 level as predominantly USD has some weakness due to Yellen’s comments and the near-zero rates for the longer term.

The euro is staying still for the moment as comments last night from ECB’s Nowotny stated that the ECB has an interest in weakening the rise in the euro’s strength.

Mario Draghi’s comments over the weekend suggested that QE is that much closer if they need to use it. He accepts it would help the short-term inflation issue they are currently facing.

Today the German IFO business climate is released, with an expected reading of 110.30 from the previous 110.4.

Cable is running out of steam but is still holding above 1.70 for now as the rate hike seems to be getting closer. This was helped along yesterday by comments from BoE’s Miles who said that he would likely vote for a rate rise before he leaves in May next year.

Today is the inflation hearing, which will more than likely add to speculation of the earlier than expected interest rate rise.

In the US we have the consumer confidence report, expected at 83.6, which is a slight improvement from the last time. We will also see new home sales data, expected to increase to 442k from 433k.

EUR/USD

Supports 1.3580 1.3560 1.3535 | Resistance 1.3615 1.3640 1.3670

USD/JPY

Supports 101.65 101.40 100.75 | Resistance 102.15 102.85 103.00

GBP/USD

Supports 1.7000 1.6970 1.6930 | Resistance 1.7060 1.7100 1.7140