UK GDP the highlight as FX consolidates and September volatility looms

EUR/USD

Range: 1.2526-1.2582
Support: 1.2480
Resistance: 1.2625

The Fed’s James Bullard failed to take the shine off the Fed minutes EUR/USD inspired rally when he warned the August FOMC minutes were ‘stale’ and recent US data flow does not warrant a ‘gigantic’ policy response but as I mentioned yesterday the US data since the meeting has been stronger and that extra policy measures from the Fed doesn’t necessarily mean QE3. There are rumours Spain is to officially ask for a help this morning with Greek/German tension building again. The USD is probably due a correction.

GBP/USD

Range: 1.5848 – 1.5870
Support: 1.5800
Resistance: 1.6000

Very little to add ahead of the long weekend in the UK with the release of the preliminary Q2 GDP reading for the UK at 9.30am this morning, the market will be looking for an upward revision to -0.5%. Like most currencies in the G10 space sterling consolidates some 60 points from the May highs. EUR/GBP continues to trade 0.7885-0.7935 with rumours that Spain are about to ask for official help.

 
AUD/USD

Range: 1.0377-1.0447
Support: 1.0350
Resistance: 1.0550

RBA Governor Glen Steven’s speech was consistent with the RBA being fairly comfortable with its current policy stance. While citing risks and uncertainties associated with the global economy and the current structural change within the Australian economy, Stevens said “Overall, growth is forecast still to be close to trend, albeit with a different composition from that seen in the past year or two, and inflation consistent with the target.” EUR/AUD trades comfortably above 1.2000 this morning with the lifestyle trading back to recent lows.