Risk rally stalls as tensions grow in Iran, with caution on the eurozone debt crisis continuing to linger

<p>GBP/USD Range: 1.5627 – 1.5651 Support: 1.5500 Resistance: 1.5750 Sterling has held onto solid gains so far this year, which has impressed although this could […]</p>

GBP/USD
Range: 1.5627 – 1.5651
Support: 1.5500
Resistance: 1.5750
Sterling has held onto solid gains so far this year, which has impressed although this could be more to do with near term dollar weakness than sterling strength at present. Today we see the release of the November mortgage approval data and construction PMI. Traders could start to become sceptical in buying cable at current levels given the slow start to equity trade today and may prefer a technical close above 1.5730 to convince them to buy more sterling. Traders are also on guard about resistance levels for the strength of sterling with euro/pound at 0.8680.

EUR/USD
Range: 1.3023-1.3058
Support: 1.2850
Resistance: 1.3125
The euro traded sideways in the Asian session after yesterday’s risk rally took the single currency just shy of the technical 21-day moving average of 1.3080 Tensions between Iran and the US are simmering, with Tehran threatening to take action if the US carries out its threat to send an Aircraft carrier into the Gulf. Traders remain cautious of what lies ahead for the eurozone crisis and so as such it not surprising to see a pause in the risk rally today. The main focus for the single currency today will be the German auction for 10-year bunds. There is a lot of speculation of a 1.3125 expiry in the options market this afternoon, which could act as a magnet for the single currency.

USD/JPY
Range: 76.62-76.82
Support: 76.30
Resistance: 77.50
The Japanese market returned today after an extended New Year holiday but this failed to inspire the pair as we continued to trade in tight ranges with maybe a slight bias to test the downside. The FOMC minutes revealed members believed more stimulus may be needed and the minutes could be more effective if accompanied by enhanced communication. Several members said that the Fed’s mid 2013 low rate pledge might need to be adjusted before long and they noted the labour market improving slowly. Minutes.

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GBP/USD
Range: 1.5627 – 1.5651
Support: 1.5500
Resistance: 1.5750
Sterling has held onto solid gains so far this year, which has impressed although this could be more to do with near term dollar weakness than sterling strength at present. Today we see the release of the November mortgage approval data and construction PMI. Traders could start to become sceptical in buying cable at current levels given the slow start to equity trade today and may prefer a technical close above 1.5730 to convince them to buy more sterling. Traders are also on guard about resistance levels for the strength of sterling with euro/pound at 0.8680.

EUR/USD
Range: 1.3023-1.3058
Support: 1.2850
Resistance: 1.3125
The euro traded sideways in the Asian session after yesterday’s risk rally took the single currency just shy of the technical 21-day moving average of 1.3080 Tensions between Iran and the US are simmering, with Tehran threatening to take action if the US carries out its threat to send an Aircraft carrier into the Gulf. Traders remain cautious of what lies ahead for the eurozone crisis and so as such it not surprising to see a pause in the risk rally today. The main focus for the single currency today will be the German auction for 10-year bunds. There is a lot of speculation of a 1.3125 expiry in the options market this afternoon, which could act as a magnet for the single currency.

USD/JPY
Range: 76.62-76.82
Support: 76.30
Resistance: 77.50
The Japanese market returned today after an extended New Year holiday but this failed to inspire the pair as we continued to trade in tight ranges with maybe a slight bias to test the downside. The FOMC minutes revealed members believed more stimulus may be needed and the minutes could be more effective if accompanied by enhanced communication. Several members said that the Fed’s mid 2013 low rate pledge might need to be adjusted before long and they noted the labour market improving slowly. Minutes.

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