· Euro was able to make substantial gains after bouncing off the multi month lows of Tuesday. Hawkish ECB comments from multiple members tempered speculation of interest rate cuts before the end of the year, which combined with surging Oil supported the single currency. German CPI figures showed a drop of -0.3% in August. Looking ahead for German Unemployment Rate seen unchanged at 7.8% after an Unemployment change forecast at -10K in August. Sterling suffered the most of the majors as a key resistance on the EUR/GBP was broken at .8000. Cable was able to recover in line with the Euro but fell heavily after the US Durable Goods Orders to hit New Year lows below 1.8300. Looking ahead for CBI Trends Orders August with a forecast at -30 vs. -36 in July.
Technical Outlook:
EURO
R1: 1.4880 S1: 1.4700
R2: 1.4900 S2:1.4690
Euro is expected to give a bear move for the day. Trading range for the day is expected between 1.4710-1.4850 levels for the day. Stochastic lies in oversold area and is seen trending up giving room to a slight upward correction. Momentum is also supporting the upside move.
Pound
R1: 1.8500 S1: 1. 8310
R2: 1.8520 S2: 1. 8330
chart pattern gives the possibility of slight upward correction for the day. Trading range is expected between 1.8320-1.8480 levels . Currency has crossed the pivot levels and stochastic is also supporting the bull note .Relative strength is also supporting the bull note
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