AUD/USD: 0.9170EUR/USD: 1.3105Markets, particularly equities, remained firm as Ben Bernanke backed up his comments of the previous day, soothing market concerns about any immediate withdrawal of the Feds stimulus programme, in suggesting that QE could continue for another 12 months, depending on how the economy responds in the meantime. In the second day of his semi-annual congressional testimony he clarified that the Fed may start to scale back its asset purchases by the end of the year if the economy and in particular, the employment outlook continues to improve and added that monetary policy will remain accommodative for the foreseeable future.
Elsewhere, initial US jobless claims dropped sharply by 24k to 334k in the week ended July 12, - the lowest figure since March - , while the Philly Fed survey rose to 19.8 in July which came as a surprise, given the expectation of a fall to 6.8, and helped to underpin the dollar.
There is little of economic importance out today so it could be a reasonably quiet run into the weekend and technically the Euro has done little of interest. Further sideways trade, using 1.3100 as a pivot appears to be the most likely outcome. Having broken below the initial support at 1.3085 (50% of 1.3415/1.2753) the Euro has bounced back from its lows at 1.3065 after the Portuguese Government survived a no confidence vote, and now sits roughly in the middle of the day's range. Today's low therefore becomes the first minor level to watch, below which could see further declines towards 1.3035 and then back to 1.3000, beneath which, minor Fibo support/200 H MA lies at 1.2980.
On the topside, today's high has been 1.3126, a break of which would see a run towards yesterday's peak at 1.3177, ahead of last week’s top at 1.3205. I don't really see it up here today but if wrong, further gains would lead towards 1.3255 (76.4%). Beyond this, there is downtrend resistance at 1.3360, which in turn comes ahead of the 1.3415, 19 June high.
The short term charts are pretty flat and I have no real bias in either direction. Thus I suspect that further 1.30/1.32 is going to dominate, with the market getting itself chopped around by false breaks on either side and so I would look for something else to trade for the next day or so, or stay square and hang on to your cash! Uninspired. Have a good w/e.
Economic data highlights will include:
German PPI
