Month end rebalancing likely to dominate proceedings ahead of the Central Bank meetings
City Index July 31, 2012 6:46 PM
<p> EUR/USD Range: 1.2250-1.2290 Support: 1.2210 Resistance: 1.2410 The euro has consolidated at lower levels so far this week with some market perception that the […]</p>
The euro has consolidated at lower levels so far this week with some market perception that the ECB president could disappoint the market after his comments last week raised expectations that some sort of co-ordinated action from the Central Banks will be announced this week. I’m expecting more headline trading today in these summer illiquid markets with early suggestions that the month end rebalancing flow is a slight positive for the single currency.
Range: 1.5702 – 1.5729
Sterling continues to trade from a positive tone as we consolidate above 1.5700 with EUR/GBP struggling to hold above 0.7800. The GFK consumer confidence was released over night and was unchanged at a depressing -29 level. No data is released today as we await the Central bank meetings with month end rebalancing flows likely to dominate today. I will be looking to use the usual EUR/GBP flow to add to shorts.
The move lower in EUR/JPY thus far this week initialled yet another warning from the Japanese finance minister Azumi that he will not rule out measures to stop the JPY appreciating. It’s all about the FOMC meeting tomorrow for this pair with the market split on whether the FED will add stimulus this month as the economy continues to slow and the political pressure to act grows.
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