AUD/USD: 0.9125EUR/USD: 1.3255The Euro is unchanged again today, in pretty dire market conditions, and doing very little despite the better than expected EU Q2 GDP that rose by 0.3% qq (exp 0.2%), and in doing so is seeing the EU inching its way slowly out of recession. The individual components saw French GDP jump to 0.5% qq (exp 0.2%), while in Germany, the GDP rose 0.7% qq (exp 0.6%). The Euro was unable to make any real ground though, as the feeling grows that the Fed may begin to taper sooner rather than later, - sooner than we are likely to see any tightening from the ECB - possibly as early as September. This has helped to keep the dollar underpinned, despite the soft US PPI number today of 2.1% (exp 2.4%) which had little overall effect, apart from keeping US equities under some downside pressure.
Being Assumption Day, and with much of Europe closed, it is unfortunately going to be very quiet again, probably until the US get in, when hopefully there should be a bit of action, with a bit of data due out, led by the CPI.
Technically, we sit pretty much where we did yesterday given the 40 point range of the previous session. It has also been an inside day, neither reaching the low or the high or yesterday and thus 1.3230/1.3280 really remain the immediate breakout points.
On the downside, the Fibo support at 1.3245 (23.6% of 1.2754/1.3400) is still providing support for the Euro, but if we can get a sustained move lower, which I think could be the eventual outcome, and we can get below 1.3230, then we should see a drop to 1.3200 and possibly to 1.3155 (38.2%) and back into the congestion support.
On the topside, above 1.3280 would see good sellers at 1.3300. Beyond that, there is plenty of resistance at 1.3340 and again at 1.3380 and 1.3400, which looks unlikely to be seen today. Above that, the heavy resistance remains at 1.3400/30 and appears to be over the horizon for the time being.
Use 1.32/1.33 again today in what looks like another quiet session.
Economic data highlights will include:
US CPI, Jobless Claims, NY Empire State Mfg Index, Industrial Production, Capacity Utilization, Philly Mfg Survey
