The Euro bounced on the back on heavy EUR/JPY buying surging to the 120 level but weak US stocks pulled both pairs lower. Concerns persist after Germany Merkal failed to offer any concrete plans to assist banks. Looking ahead for Eurozone PMI services forecast at 35 vs. 34.4 previously.Sterling surged on the back in GBP/JPY buying and EUR/GBP sales with the pound developing a bullish bias against a host of currencies. The pair did give up gains against the USD late in the US session with stocks coming back under pressure. January Retail Sales are forecast at -0.1% vs. 1.6% previously.·
Technical Outlook:
EURO R1: 1.2790 S1:1.2440
R2: 1.2820 S2:1.2420
Chart pattern hints bear note for the day . Trading range for the day is expected between 1.2510-1.2720 levels for the day. If the currency is able to sustain below the psychological support of 1.2500 then we can see a free fall to 1.2420 and 1.2390 levels. Momentum and stochastic indicators are pointing down.
GBP R1: 1.4340 S1: 1. 4100
R2: 1.4360 S2: 1. 4080
Chart pattern signals a mixed to bearish movement for the day. Trading range is expected between 1.4120-1.4320 levels for the day. Currency is trading below the the moving average and Momentum and stochastic are seen trending down giving bearish crossover supported by parabolic.
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