Quite session with risk showing small positives

EUR/USD

Range: 1.2274-1.2325
Support: 1.2150
Resistance: 1.2350

Risk is trading positively following the Fed Chairman’s two day testimony that really hasn’t showed anything new with Dr Ben reiterating that tools are available to the US central bank if the economy deteriorates further. The IMF yesterday warned that Europe could suffer a serious bout of deflation if authorities do not move quickly to support the banks and economy with Angela Merkel in a similar mood adding she is optimistic that the Euro can be saved but the project has not yet been constructed in a way that we can be certain everything will work. I need to remind myself of what I write and don’t get sucked in ‘trade the extremes in the 1.2150-1.2350 range’.

GBP/USD

Range: 1.5643 – 1.5696
Support: 1.5580
Resistance: 1.5720

Really very little to add with signs summer markets are here with rumours that summer will arrive in the UK this week-end adding to a slight positive to risk. MPC minutes suggested that the BoE will act if there are no signs of improvement in the UK economy with some analysts suggesting the next option could be a rate cut! UK retail sales are released at 9.30am this morning with the market looking for a rise of 0.6%. Square here and will look to sell any rally towards 0.7900 in EUR/GBP.

AUD/USD

Range: 1.0355-1.0417
Support: 1.0250
Resistance: 1.0500

The cross move continues with investors looking to pick up yield with EUR/AUD driving the near term fortunes in the lifestyle currency. I believe most of the AUD/USD shorts have now surrendered as we powered through the 1.0350 level yesterday triggering more stops. Technically 1.0500 is now achievable but any change in stance from the RBA will have the yield addicts running for cover.