Risk lower as Japan cuts its economic outlook

EUR/USD

Range: 1.2463-1.2507
Support: 1.2380
Resistance: 1.2600

The euro and the risk trade is under pressure this morning as we consolidate in 1.2450-1.2600 as we await the Jackson Hole speech and clues from the Fed Chairman on fiscal policy. The soft IFO data yesterday was largely ignored with Spanish GDP the highlight from Europe today with the consensus being for a dismal growth reading of -0.4%. A closing break below 1.2450 encourages a move to test 1.2380 but reality bar any major news from Europe ahead of the main event on Friday is that we consolidate in a 1.2450-1.2600 range.

GBP/USD

Range: 1.5753 – 1.5796
Support: 1.5745
Resistance: 1.5830

Sterling trades from a corrective stance and mirrors general USD and risk fortunes. There is no UK data today and looking through the week the highlight is to be the Bank of England money and credit data that is to be released on Thursday with the market looking for some slightly better lending data. Consolidation seems to be the theme ahead of the Jackson Hole with maybe the usual month end EUR/GBP demand to drive the pounds near term fortunes.

 
USD/JPY

Range: 78.47-78.78
Support: 77.65
Resistance: 78.85

All about US yields as usual with the market seemingly scaling back expectations from Bernanke on Friday following the FOMC minutes last week. The JPY seemed to ignore the news overnight that Japan was cutting its Economic outlook for the first time in 10 months. At 3pm this afternoon the US consumer confidence will be released with the market looking for a slight improvement to 67 from 65.9 last month.