Currency Updates:
The pair has rebounded above its support and has validated a bullish flag. Further advance is therefore expected as the pair stands above its moving averages and the daily RSI is well directed above its neutrality area. Then, as long as 0.9120 holds as a support (previous resistance which now acts as a support), next up targets are set at 0.9540 (horizontal resistance) and 0.9760 in extension (October 2013 top). A third target is set at 0.9970 (horizontal resistance). Only a break below 0.9120 will turn the outlook to bearish with a first alternative target is set at 0.89 (horizontal support), and 0.8650 in extension (January bottom).
The EUR/USDsoared and then eased a bit after the release of CPI data. The euro is treading at 1.3655. The euro has strengthened against the dollar on 30 June in early trade despite mixed data signals from the Eurozone, helped by the dollar’s weakness after the negative data surprises from the US in the previous week. The EUR/USD rose to as high as 1.3660 after the data releases from near 1.3640 prior to that. The pair touched it’s highest since 9 June at the high. The euro-area inflation rate held steady in June at less than half the European Central Bank’s target, underscoring the challenge faced by Mario Draghi as he tries to stoke prices and ignite growth.
The USD/JPY is trading at 101.32 easing by 10 points after Industrial production printed below forecast but much better than the previous month. Traders are more concerned with the US dollar and its weakness trading at 80.09 well off its high just two weeks ago of 80.80. Safe haven trades still dominate the markets but the easing of tensions in Iraq and the Ukraine allow for a bit less stress.
23:50 GMT Japanese Tankan
01:00 GMT China PMI
01:30 GMT Japanese Cash Earnings
01:45 GMT HSBC Final Manufacturing PMI
04:30 GMT Austraila RBA
