EURUSD managed to lift back above 1.0900 after skirting to a 1.0891 low on Monday following above-forecast US data. EURJPY is also trading just off three-week highs, and most other euro crosses are holding firm. A step-up in top-level political pressure at key Eurozone leaders to come up with a bailout deal that would be acceptable to the Greek government has given the euro an underpinning. On the dollar side, the rekindled Fed tightening theme got a minor boost yesterday with above-forecast May PMI and construction spending data. The US ISM May rose to 52.8 and lifted the measure above the 51.5 two-year low in April and May, following a slightly higher 52.9 in February and a lofty 57.9 recent-high in October. The ISM rise included component gains in all but shipments, which implies some abatement of headwinds from the oil-price hit to mining and the inventory overhang, the winter port strike and weather factors that have all impacted the various sentiment surveys since November.
EURUSD moved pretty much as expected yesterday. Market rallied higher from an intraday support level but then turned lower from levels fairly close to 4h 1.5 stdv Bollinger Band. The same intraday support in the region of 1.0904 held again yesterday and the pair is at the time of writing reacting lower after challenging a resistance just above yesterday’s high. If EURUSD can’t push above Friday’s high we are likely to see further consolidation and corrections before price is ready to move higher. The nearest daily support levels are at 1.0887 and 1.0820 while resistance levels are at 1.1006 and 1.1062. Should we get corrections closer that low it’d make sense to look for buy signs of stabilization and signals close to yesterday’s low at 1.0887.
Currency Pairs, Grouped Performance (% Change)
While USDJPY moved momentarily above 125 for the first time since 2002 it is the AUD that is roaring ahead strongest at the time of writing. Following the RBA’s decision to hold the rates at 2% AUD has been up strongly against everything else with AUDUSD and GBPAUD leading the pack (AUDUSD up and GBPAUD down). AUDUSD has moved above previous two daily highs and has just hit a resistance at 0.7690, while GBPAUD has rolled over and broken a daily uptrend. EUR has attracted money with the exception of EURAUD that is moving lower from a resistance that caused some weakness in the pair already yesterday. GBP has been weak across the board.
Main Macro Events Today
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