EUR/USD surged yesterday after being capped for four consecutive days below 1.2200. Following muted European action, as the markets came to terms with the planned early exit from Iraq, EUR/USD rose into the higher tier of its broad present range. The turn around occurred after the Asian Central Bank whose offers had been capping the market withdrew and then became a buyer.
Although a move was expected the early move did catch the market slightly unaware. US personal income rose 0.6% largely in line with expectation yesterday, while consumption expenditure showed its largest rise since Oct 2001 by rising 1.0%. Today has seen the French PPI for May come in higher than the market expected at +0.6% for the month. There is little else of note in the diaries this morning while this afternoon sees US Consumer Confidence and a Trichet speech in Frankfurt this evening.
After the recent price moves the EUR/USD picture looks broadly the same as Mondays outlook with the exception of the barrier at 1.2200, after that was removed on the break to 1.2229. A barrier is now seen at 1.2135, so the defensive offers below around 1.2130 currently serve as resistance. The overall outlook remains the same and bears will have been lifted by the failure to hold above 1.2200. EUR/USD currently trades steady at 1.2160-1.2170.
Although a move was expected the early move did catch the market slightly unaware. US personal income rose 0.6% largely in line with expectation yesterday, while consumption expenditure showed its largest rise since Oct 2001 by rising 1.0%. Today has seen the French PPI for May come in higher than the market expected at +0.6% for the month. There is little else of note in the diaries this morning while this afternoon sees US Consumer Confidence and a Trichet speech in Frankfurt this evening.
After the recent price moves the EUR/USD picture looks broadly the same as Mondays outlook with the exception of the barrier at 1.2200, after that was removed on the break to 1.2229. A barrier is now seen at 1.2135, so the defensive offers below around 1.2130 currently serve as resistance. The overall outlook remains the same and bears will have been lifted by the failure to hold above 1.2200. EUR/USD currently trades steady at 1.2160-1.2170.