The implementation of austerity measures, combined with the stimulation of growth, is the best way to combat the EU debt crisis

<p>Angela Merkel reiterated her insistence that the implementation of austerity measures, combined with the stimulation of growth, is the best way to combat the EU […]</p>

Angela Merkel reiterated her insistence that the implementation of austerity measures, combined with the stimulation of growth, is the best way to combat the EU debt crisis. Since the victory of the strongly pro-growth Francois Hollande in the French presidential elections the German leader has been pressurized to relax her line on austerity.
EUR/USD
Range: 1.2929 – 1.2963
Support: 1.2892
Resistance: 1.2985

Euro-dollar closed in New York at 1.2934, with rate pulling back from its recovery highs of 1.29799 having met stiff resistance into 1.2980. Rate got an early lift to session highs of 1.2944 as news of JP Morgan’s loss hit the wires, but rally quickly met strong US name supply which reversed tack. The move through 1.2920/15 triggered stops to take rate to lows of 1.2905. Move lower was aided by strong euro-sterling sales, this rate eventually taking out its barrier at 0.8000, touching 0.7995 before bouncing. This bounce in the cross relieved pressure on euro-dollar, the rate itself meeting strong demand ahead of its own option barrier at 1.2900. Rate recovered to 1.2930, settling into the Asian afternoon between 1.2915/30 before slipping down into 1.2910/25 ahead of the European open. Bids remain in place between 1.2905/00 ahead of barriers at 1.2900. Stops below to expose 1.2880.

GBP/USD

Range: 1.6099 – 1.6141
Support: 1.6100
Resistance: 1.6135

Cable closed in New York at 1.6138 with rate getting an early lift to session highs of 1.6143 as the option barrier at 0.8000 was targeted and triggered, a US bank and a UK clearer the stand out sellers as rate dipped to 0.7995. Cable reversed off highs, as the cross bounced back, the rate drifting off to 1.6117 in Asia, with early Europe adding further weight to extend move to 1.6101. The break of 1.6110 seen adding to the opening soft tone with Thursday’s lows at 1.6088 moving into view. A break here exposes the recent low at 1.6067. Euro-sterling has extended its recovery to 0.80215, this rate also reflecting the easing tone in sterling as it holds firm up against that high. Cable resistance seen between 1.6140/50 ahead of 1.6180/85 and 1.6200. Euro-sterling support remains at 0.7995 with resistance at 0.8025/30

Gold

 

Range: 1,581.91 – 1,593.48
Support: 1,587.47
Resistance: 1,593.71

Gold recovered yesterday with Euro on a modest recovery in risk appetite, as Greek politicians expressed optimism on the ability of Greece to form a coalition government. Along with the decline in US initial jobless claims helped lift risk assets including gold. Overnight gold has fallen around $10 due to comments that Chinas gold demand growth has been seen as stagnating, along with weak Chinese CPI and Industrial Production figures.

Support now looks at 1587.47, followed by 1583.61 and then 1577.37, resistance tops out at 1593.71, 1,599.96 and 1,603.81.

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