Positioning dominates after euro rises on weak PMI data

<p>The FX markets have traded in consolidated ranges thus far this week as positioning dominates sentiment. Just after 6pm London on Monday we saw an […]</p>

The FX markets have traded in consolidated ranges thus far this week as positioning dominates sentiment. Just after 6pm London on Monday we saw an explosive 60-point move higher in the euro as the market triggered stops above 1.3810 following the intraday selling that had been built up subsequently to poor global PMI data.

The equity markets in Asia remained a struggle following the weak close in the US which hasn’t been helped by news that the G8 summit scheduled to be held in Sochi has been replaced by a G7 meeting in Brussels as geopolitical concerns from Ukraine continue.

The head of the Japanese pension fund (GPIF) Mr Mitani said that the role of the GPIF was not to support Japanese stocks but to pay pensioners that had invested in Japan. Not for the first time both antipodean central bankers have commented on exchange rates. New Zealand’s Finance Minister English still sees the exchange rate as too high while RBA Deputy Governor Lowe said that a lower AUD continues to play a stabilising role in the Australian economy.

Today’s data events come in the form of the IFO survey from Germany along with UK inflation data as the US session gives us the latest consumer confidence reading.

 

EUR/USD

Supports 1.3775-1.3745-1.3705 | Resistance 1.3875-1.3920-1.3965

 

USD/JPY

Supports 102.00-101.80-101.55 | Resistance 102.70-103.00-103.50

 



GBP/USD

Supports 1.6440-1.6415-1.6380 | Resistance 1.6515-1.6545-1.6600

 

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.