Quite session with risk showing small positives
City Index July 19, 2012 1:00 PM
<p> 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 […]</p>
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’.
Range: 1.5643 – 1.5696
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.
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.
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.