Currency Updates:
Mild USD strength has resumed in the FX markets, however demand for the greenback remains subdued. Yesterday we saw EURUSD under pressure on speculation that Greece will not be able to repay its Debt to the IMF in June. As a result the common currency broke 1.1300, only for a while though. The lack of macroeconomic indicators didn’t give further boost to the reversal of the last week’s trend. This is Likely to change today though, as the calendar is busier with German ZEW and EU inflation data to be released at 09:00 GMT.
A little earlier, UK will release inflation data at 08:30, including PPI and CPI figures for April. The pair has been on an upwards trend after the general elections, however the rally has lost steam in the last 2 days. GBPUSD has fallen from 1.5814 to 1.5660 at time of writing. Technical indicators suggest that the pair may extend its decline down to 1.5540, especially should the data disappoint.
A combination of USD demand and RBA deputy member stating that there is still further scope to lower rates if needed, was reason enough for the AUDUSD to extend its decline, by breaking the 0.8000 level. As with most other major currencies, technically the pair is expected to be pressured and could head towards 0.7940 support before setting a new direction.
GOLD jumped higher up to 1231 yesterday however the metal is trading at 1222 just before the start of the European session. Critical resistance at 1233 with support levels at 1210 and 1200 in extension.
Trading quote of the Day: “Risk comes from not knowing what you’re doing.”
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