Strong Chinese data kicks 2012 off with a risk positive
City Index January 13, 2012 2:00 PM
<p>GBP/USD Range: 1.5332 – 1.5395 Support: 1.5270 Resistance: 1.5450 Sterling held the 1.5270 support level mentioned yesterday with the BOE keeping rates on hold as […]</p>
Range: 1.5332 – 1.5395
Sterling held the 1.5270 support level mentioned yesterday with the BOE keeping rates on hold as expected. The market expects further QE to be added in February or March after the MPC receives the inflation report. Yesterday saw an impressive position adjustment in euro/£ which kept cable below the resistance level of 1.5420-50 with the cross expected by traders so far to run out of steam towards the 0.8400-20 level. This morning see’s the release of the UK PPI data at 9.30.
The single currency bounced back from the brink yesterday holding what is now a double bottom at 1.2660. Yesterday the Spanish and Italian auctions were well subscribed to, catching a short market and with the ECB remaining on hold this month along with a surprising weak reading in the form of US retail sales an aggressive short squeeze had traders running to cover shorts. Overnight the Euro received a further boost with reports in France’s Les Echos that a Greek debt deal could be reached by the end of next week. We have another Italian debt auction this morning and there is every chance we could trade higher if successful.
On the JPY good demand is reported at 76.50 but if we see a weaker US trade balance this afternoon along with a weaker Michigan consumer sentiment then a US yield change could endanger this level. Today however, we switch this commentary to AUD from the JPY as the Yen price action remains somewhat boring. Indeed, thank you for your patience as our continual pieces on the USD/JPY appears to crushed the volatility in this pair now. The basic trading range seen by most traders in the AUD/USD pair is 1.0100-1.0400 with barriers reported on either side.
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.