Monday, June 27, 2011

Forex Morning Review - Euro Bounces Back

    Coming Up Today (all times GMT)
  • GBP - Current Account (08:30)
  • GBP - Inflation Report Hearings (09:00)
  • USD - CB Consumer Confidence (14:00)

The EURUSD rose sharply from 1.4100 to climb as high as 1.4328 overnight. Breaking news that Greek bondholders including European banks may be willing to rollover and extend the maturities of the holdings was positive news for equities, commodities and higher yielding currencies as the threat of an imminenet Greek default  receded.
The Euro gained against most of it peers and led a more general relief rally.
The pair held above 1.4100 maintaining the 1.40 level as a key ressistance. The 228 pip intraday move higher in the pair suggests that volatility may be heightened in days to come. Traders are said to be watching this level as a barometer for direction as uncertainty looms. There is a battle of weakness taking place between the EURO and the USD. The question is which currency will be in greater demand and in better condition in the years ahead.  
Support/Resistance: 1.4175/1.4415
The cable has weakened significantly in the last fortnight, from the lofty heifght of 1.6700 to breach below the 1.60 level once again maaking a low at 1.5940. The 1.60 level has been a strong support for the cable in recent months and has provided momentum on the way up. The 1.60 level will dictate direction. Inflation data and interest rates are important variables for the Sterling pound going forward 
Support/Resistance: 1.5880/1.6250
Published: 28 June, 2011
written by: Andrew Economou , Market Analyst ,