Month end rebalancing to dominate

<p>The euro continues to defy gravity in my opinion as market positioning dominates the single currency as EUR/USD trades above the 200-day moving average at […]</p>

The euro continues to defy gravity in my opinion as market positioning dominates the single currency as EUR/USD trades above the 200-day moving average at 1.3033, with 1.3080 seen as the next near term resistance. I’m cautious of chasing this move higher ahead of the EU HICP inflation release at 10am this morning, with the market looking for 1.4% year on year – below Mr Draghi’s target of 2%.

The US dollar is trading with a softer tone across the board as just about every bank I speak to suggests the month end rebalancing signals are strongly dollar negative. If this is the case I’ll be looking to enter dollar longs on extremes today for next week’s key data releases.

This morning’s data highlight will be the inflation data from Europe as I mentioned but we also get lending data from the UK with the US session bringing us PCE data along with the Chicago PMI index and the Michigan consumer sentiment survey.

 


EUR/USD

Supports 1.3000-1.2950-1.2845 | Resistance 1.3080-1.3120-1.3200


USD/JPY

Supports 100.30-99.60-98.50 | Resistance 102.80-103.30-103.80


GBP/USD

Supports 1.5150-1.5080-1.5000 | Resistance 1.5250-1.5325-1.5400

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