RBA slightly hawkish ahead of the ZEW,UK CPI,US PPI & Bernanke’s testimony to Congress
City Index July 17, 2012 1:00 PM
<p> EUR/USD Range: 1.2264-1.2312 Support: 1.2150 Resistance: 1.2350 EUR/USD triggered stops through the 1.2300 level overnight following on from yesterday’s gains after weaker US retail […]</p>
EUR/USD triggered stops through the 1.2300 level overnight following on from yesterday’s gains after weaker US retail sales data has left the market eagerly awaiting any hint from Bernanke that QE3 is nigh. Before the Fed chairman today we have the German ZEW economic sentiment which is expected to fall to -20 from -16.9 in June. Spain Greece and the EFSF will auction short tenor bills. I’m cautiously bid risk and EUR/USD for the first time in a long time as the weight of short positions will dominate into Bernanke over the next few days.
Range: 1.5623 – 1.5677
Sterling still trades constructively with the pound catching its latest bid tone from rises in EUR/USD and AUD/USD following a weaker US retail sales number yesterday. The Bank of England inflation letter is tentatively scheduled later today following the release of the UK CPI data at 9.30am with BoE Governor King scheduled to deliver a speech later in the day.
The minutes from the RBA meeting where rates were left at on hold at 3.5%, appear to show the central bank appear to be happy with the pace of easing. They also acknowledged that China was slowing less than they previously expected and the news from EU summit was encouraging. The AUD looks set to close above 200-day moving average at 1.0275 as the market continues to cut short positions and I believe further stops will take place above the recent high of 1.0330. I’m not standing in the way of this move today as I can smell more blood on this street.
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