EURUSD trades within a tight range over the last 24 hours; the 1.1050’s and 1.0960’s seem to be the key break out levels. A breach above the 1.1050’s will open up a daily chart lower top target around 1.1120’s – 60’s. Any move below the 1.0960’s could lead the pair lower towards the 1.0920’s with the possibility of even 1.0840’s as reasonable targets for traders who are considering EURUSD short positions.
Yesterday’s EURUSD trading managed to trade higher near the 1.1085 level after the weak U.S. retail sales data; the key driver for the pair still remains to be the outcome over the Greek saga, since finding a resolution between the Greek creditors remains illusive. As long as no real progress is seen regarding Greece, more downward pressure on the EUR looks likely. Something that may be on the minds of some EUR traders is whether the ECB will make a move to intervene in the FX market to support the EUR? My view is that this is something that can’t be ruled out, however, the fact that the ECB is still at an early stage with regards to QE programs can only support the potential downside price action for the EURUSD. The likelihood of any ECB intervention is highly unlikely; however, stranger things have happened in the past.
It is expected that the ECB will keep policy unchanged for this week’s interest rate announcement on Thursday, while the ECB continues to call on Eurozone members to implement reforms. It is expected that the ECB will remain on hold for the rest of the year, while the ongoing commitment to implementing QE continues. The unknown risk to the market is that should contagion happen because of the Greek crisis, any sudden ECB measures, as a response, could lead to market adjustments that may not already be priced in.
The latest release of the U.S. FOMC minutes showed a cautiously positive outlook, but concerns over Greece and a China slowdown does not guarantee that the U.S. fed will make any upward moves for interest rates in September.
Currency Pairs, Grouped Performance (% change)
The new Currency Movers Charts show the percentage change from previous day’s close to the current moment against the other major currencies. This morning EUR is trading higher against the other majors. Commodity dependent currencies’ such as the CAD, AUD and NZD performance remains soft against the USD. AUD is struggling to trade above 0.7496 July 10th high while GBPJPY battles for continued upward momentum. Across the board money seems to be supporting the USD.
Significant daily support and resistance levels for these pairs are:
Main Macro Events Today
• AUD Business confidence in Australia improved in June, as its index came in with a score of +10. That’s up from the upwardly revised +8 in May (originally +7), and it also marks the highest reading since September 2013.
• USD Retail sales fell by 0.3% in June. The drop in sales came following a 1.0% in May, which was downwardly revised compared to the 1.2% jump originally reported. On a y/y basis retail sales in June were up by 1.4%, reflecting a notable deceleration from the 2.3% annual growth seen in May.
• GBP CPI remained unchanged y/y, in contrast to a 0.2% increase in. Output prices decreased 1.5% y/y in June following a 1.6% drop in May. Prior to July 2014, there has been no fall in the annual rate since October 2009.Input prices declined sharply by 12.6% y/y in June, bigger than a 12.3% fall in May. On a monthly basis, input prices declined for the second month. Prices slid 1.3% after easing 1.1% in May. House price inflation accelerated to 5.7% in May from 5.5% in April. Month-on-month, average house prices gained 0.9% percent.