Range markets continue ahead of the IFO survey and UK retail sales data
City Index April 20, 2012 1:00 PM
<p>EUR/USD Range: 1.3127-1.3165 Support: 1.2980 Resistance: 1.3210 Still in the 1.3050-1.3250 range and very little to add with rumours of a French downgrade yesterday not […]</p>
Still in the 1.3050-1.3250 range and very little to add with rumours of a French downgrade yesterday not having the legs to push us through 1.3050 ( 1.3070 the low ), the denial and a large custodial order in EUR/AUD caught the intraday market short pushing us back to the top of the three-day range at 1.3170. Today’s data highlight will come in the form of the German IFO business climate index with the market expecting a slightly lower print of 109.50 from 109.80 in March. This week-ends first round French presidential election may distraught the opening in Asia on Monday.
Range: 1.6036 – 1.6071
Sterling continues to trade with a bid tone with the support coming yesterday exactly where it should have just above 1.6000 with the years highs being taken out at 1.6060. Although it seems the MPC are signalling a pause in monetary stimulus I personally find it hard to be bullish the UK with such dismal growth prospects especially with QE3 in the US looking more unlikely. If I’m pushed to express a GBP bullish view then I’m seller of EUR/GBP between 0.8220-40 for a move towards 0.8000.
The overnight range says it all with cross JPY markets remaining bid adding a bid tone to the pair despite lower equity markets. I expect another day of range trading here where I’m looking to buy 81.30 for a test of 82.00. This week-end we will get the final headlines from the G20 meeting and the release of the HSBC China flash PMI on Sunday as we await the all important BOJ meeting on the 27th for signs of addition stimulus.