Euro poor data out of the Euro zone made sure that the downside continued with year lows tested just under the 1.44 level. July Retail sales fell more than expected at -0.4% which combined with revised lower June sales left the Euro on the back foot. Failure to break the year lows resulted in a recovery towards opening levels. Looking ahead for July German Industrial Orders which are seen rebounding after falling -2.9% in June. The ECB September Rate decision widely expected to remain at 4.25%. Attention will be on President Trichet statement after the decision . Sterling continued to weaken on USD strength testing the downside. Reports that UK banks may have used more than twice the emergency funding as previously thought also weighed on the pound. The August Services PMI jumped to 49.2 from 47.4 in July. Looking ahead for Bank of England is expected to hold at 5.00%. Also released is the Halifax House Price Index forecast to fall -1.8%.
Technical Outlook:
EURO R1: 1.4575 S1: 1.4380
R2: 1.4610 S2:1.4350
Euro shows no signs of reversal and continues to be in bear note. Currency is expected to Trade in the range of 1.4390-1.4560 levels for the day. Stochastic is seen flat and remains silent on the issue but momentum is trending down.
GBP R1: 1.7820 S1: 1. 7660
R2: 1.7840 S2: 1. 7640
Pound bears have confirmed there position .Currency is expected to trade in the range of 1.7670-1.7810 levels. Currency has broken all the key support levels and is seen trending down .Momentum is also supporting the bear note.
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