Subdued start with year-end repatriation likely to dominate this week

<p>EUR/USD Range: 1.3246-1.3286 Support: 1.3100 Resistance: 1.3350 It’s a busy week for European data with investors optimistic the 1.3100-1.3300 range of late can be broken. […]</p>

Range: 1.3246-1.3286
Support: 1.3100
Resistance: 1.3350

It’s a busy week for European data with investors optimistic the 1.3100-1.3300 range of late can be broken. We start this morning with the release of the German IFO survey with the consensus forecast being 109.7 pretty close to last month’s reading of 109.6. Later in the week see’s the release of unemployment, retail sales and CPI data with any disappointment likely to hurt the single currency after last week’s weaker PMI readings.

Range: 1.5851 – 1.5886
Support: 1.5750
Resistance: 1.6050

The main event for the pound this week is likely to be the release of the Q4 GDP data on Wednesday with the consensus being -0.2% q/q and 0.7% y/y. Sterling continues to trade in a buy dips mode although a clear break through 1.5900-1.5920 is proving difficult with a daily close above this level signalling an extension to 1.61-1.6150. I expect the usual month end EUR/GBP demand at the end of the week.
Range: 82.36-82.79
Support: 81.80
Resistance: 84.20

The JPY seems to have started the week in a consolidation phase as the market awaits the Japanese financial year end and speculation of year end transactions and possible Toshin issuance flows. The IMM data pointed to a reduction in speculative JPY shorts last week but traders will be looking at support levels in the cross JPY market to possibly re-establish short JPY exposures. AUD/JPY and EUR/JPY supports are seen at 85.15 and 108.50 respectively.


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