Yet again, we’re experiencing tight FX trading ranges for the main currency pairs with little new news to report. From yesterday, a slightly weaker dollar was probably the main highlight. US Retail Sales missed expectations, showing a monthly decline of -0.1% versus market consensus for growth of +0.3%. As a result, the dollar faced some selling pressure with EURUSD breaking through the 1.24 ceiling again. EURUSD saw resistance kick in at the 1.24/1.2409, a break there will see 1.2450/55 come into play. Similarly GBPUSD too also broke higher although failed to break through a key psychological level of 1.40. However, it remains close to that level this morning and we would expect it to move through there at some stage today. We expect to see resistance at 1.4030 which represents the 50% line of the recent 1.4345 to 1.3715 sell off.
EURGBP continues to be the broken record with moves primarily based on Brexit related news. No new news this week has seen sterling claw back some of last week’s losses with EURGBP hitting lows of .8841 (GBPEUR 1.1311). As we have highlighted numerous times at this stage, EURGBP is stuck in this very tight range of approximately .87-.90 (1.1111 – 1.1494), so .8850 represents that mid-point. Anything higher than that, would represent potential opportunities for sterling buyers and last week we saw a surge in our client’s activities in purchasing the pound. Similarly in reverse, anything below the .8850 line may represent some value for sterling sellers. Now might be a good time to review your requirements.
Overall markets are showing slight signs of a risk on appetite. Generally European stocks have this morning in positive territory following an uncertain session in Asia as investors gauge the implications of the latest personnel changes in the Trump administration. US equities had closed in the red yesterday in response to the weak retail sales figure. Today has the potential to be another one of these paint drying days with little economic data of note and anything else scheduled.