Subdued start with year-end repatriation likely to dominate this week
City Index March 26, 2012 1:00 PM
<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>
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
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.
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.
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.