Market Update 20/07/09
Key Themes
The main themes deciding market direction currently are: –
Positive US corporate earnings and improved economic data has improved risk appetite away from the USD and JPY.
China holding record reserves of USD. Could lead to USD weakening as China seeks to balance it’s foreign currency reserves.
IMF concern over UK government handling of the economy. This is leading to a very cautious view of the Pound.
In the News
The data last week was mixed with positive earnings in the US driving risk appetite. The jobless figures in the UK and US continued to rise however and this is still leading to a very cautious view on the overall economic situation.
Last Week Technical Trading
GBPUSD – With the USD weakening last week has moved into the middle of the range that has been active since mid June. In the short term watch with caution any move below 1.6260 or above 1.6480
EURGBP – EUR has been climbing against GBP since mid June. Having now broken and held above 0.8600 a move higher looks likely.
GBPCHF – Moved lower last week although didn’t break through low support
GBPJPY – Moved strongly higher last week by 5 big figures. The break higher of 155.00 is a strong sign.
GBPAUD – AUD strength has held against GBP and is now trading at the support level that has been in place since mid June
GBPCAD – Moved significantly lower by 6 big figures as appetite for the commodity currencies increased. Next support at 1.8100 level
EURUSD – Moved steadily higher last week. Now trading at 1.4170. Next resistance comes at 1.4200.
Data released today
Monday 20th July
No major data releases today
Market Sentiment and Consensus
EURUSD
This week – expected higher as long as it doesn’t trade below 1.3963
GBPUSD
This week – expected flat in the range of 1.6222 to 1.6481
EURGBP
This week – expected higher as long as it doesn’t trade below 0.8535
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