EUR/USD: 1.2605
The Euro did precious little during the session today, even after the release of the slightly softer EU PPI data (-0.5%mm, +2.3%yy), and drifted through the day in quiet fashion. Not much looks like changing today, with the US on holiday for July 4th Independence Day .
Overall the Euro has managed to hang on, just above 1.2600, with the market eyeing the possibility of the ECB giving a kick start to the economy with a rate cut on Thursday, following the weak PMI manufacturing data earlier in the week. The ECB is expected to cut by 0.25% to 0.75%. With the cut pretty much priced in, the upside for the Euro could well be disappointing, and the poor data of recent times could well be the focus. The ECB looks likely to be joined in easing monetary policy by the BOE who also meet on Thursday and very possibly by China, where speculation continues over an impending cut in the RRR.
Elsewhere in EU news, France cut its growth forecast for 2013 to 1.2% from 1.75% under the previous government. Its growth forecast for this year was slashed to 0.3% from 0.7%.
Stock Markets are obviously gearing up for further stimulus and have generally had a good day with their third successive rise. DAX +1.3%, CAC+1% ESTOXX50 +1.25%, S+P 0.6%.
Technically there is little to add from yesterday, with little looking likely to change in the next 24 hours. I suspect another session of sideways trade within the Fibo levels of 1.2525/1.2665. Quite possibly it will be even closer than that, and today's range of 1.2560/1.2625 could well cover it in the absence of NY.
The charts are slightly mixed but overall they are neutral and noncommittal in directional bias for the time being, so use the range as a guide for the coming session. The economic data from Europe will be today's highlight, with the EU Services PMI data and then Retail Sales likely to provide the only volatility, unless we get an unexpected headline from the EU.
