Subdued FX markets despite weaker risk

<p>EUR/USD Range: 1.2493-1.2522 Support: 1.2450 Resistance: 1.2625 Euro opens up in the European session just above 1.2500 in subdued trading conditions with the 1.2450 support […]</p>

Range: 1.2493-1.2522
Support: 1.2450
Resistance: 1.2625

Euro opens up in the European session just above 1.2500 in subdued trading conditions with the 1.2450 support level still alive. Today the Spanish and Italians will hold auctions at 9.30am and 10am respectively and this afternoon we get a gauge on the US economy with the release of the consumer confidence number for June with the consensus being for a reading of 64. We seem to be in a holding pattern ahead of the EU summit on Thursday/Friday but already the signs are not encouraging for risk with ECB’S Nowotny saying ‘don’t expect too much from EU summit’.

Range: 1.5562 – 1.5586
Support: 1.5475
Resistance: 1.5650

Sterling opens in London exactly where we left it just below 1.5600 after technical supports at 1.5540 and 1.5475-80 remained intact yesterday. The only macro data from the UK is the PSNB data at 9.30am this morning as we await the main event for sterling on Thursday in the form of the release of Q1 GDP with the consensus being for a dismal -0.3% reading.
Range: 79.41-79.77
Support: 79.10
Resistance: 82.00

The JPY continues to strengthen with reputation flows and cross/JPY selling dominating the theme despite a potential political JPY negative with regards to the consumptions tax vote. This morning the lower house passed the bill to double the Japanese consumption tax but with 57 DPJ members voting against the government with their leader Ozawa voicing strong opposition ,a no confidence vote to current leader Noda’s leadership and a break-up of the DPJ could be on the horizon which would obviously be a JPY negative.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (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.

For further details see our full non-independent research disclaimer and quarterly summary.