Euro kept to a relatively tight range with weakness before the ECB press conference being short-lived. When Trichet said nothing to spook the market and the ECB held at 1.00% with no expansion of the quantitative easing the market tested 1.4200 but couldn’t close above. Looking ahead, Trichet Speaks. Sterling surged on news housing prices jumped 2.6% in May from a Halifax report. The BoE held at 0.5% and did not expand QE program. Rumors of PM Brown resignation sent the pair crashing towards 1.61. Also weighing on the Pound was end of the $15B chinalco-Riotinto deal. Looking ahead for PPI is forecast at 0.8% in May.
Technical Outlook:
EURO chart pattern is expected to be on a sideways note for the day. Currency is expected to trade in the range of 1.4060-1.4300 levels. Daily Momentum and stochastic are seen trending down and Euro is trading on the moving average only crossover can confirm the trend. Parabolic is holding on its bullish outlook. Good support is seen at 1.4020 break of which will see 1.3980 and key resistance is seen at1.4330 levels .
GBP chart pattern is expected to form a bearish crow pattern and trade in the range of 1.5990-1.6230 levels for the day. Momentum is seen trending down and the Relative strength index is also trending down hinting towards the possibility of downside correction to 1.5930 levels break of which will take it to 1.5880 .Key resistance for the currency is seen at 1.6280 levels.
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