Subdued FX markets despite weaker risk

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 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’.

GBP/USD
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.
USD/JPY
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.