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All eyes will be on the EU summit schedule to be held in Brussels today

Article By: ,  Financial Analyst
July 21, 2011 10:32 AM
EUR/USD
Range: 1.4210-1.4291
Support: 1.4160
Resistance: 1.4305
The dollar was already on the back foot going into Asia as Treasuries dipped on fears that the Gang of Six plan for raising the deficit ceiling may not be too well received by ratings agencies. Today will be all about comments from discussions on the second bailout package for Greece and the financial stability of the eurozone area. There’s scepticism that we will get the conclusion the market is hoping for as there is too much to debate and finalise in one day. The euro shrugged off the weak Chinese HSBC PMI data coming in at a 28-month low of 48.9, which caused other ‘risk on‘ currencies to weaken as positive headlines hit the wires.
GBP/USD
Range: 1.6149 – 1.6195
Support: 1.6040
Resistance 1.6220

 

Sterling got a boost from the MPC minutes yesterday, as the reference to QE seen in last month’s minutes mysteriously vanished. It’s back to secondary markets for the pound, as the euro will dominate proceedings today. Medium-term views on the MPC and sterling will be data dependant as we approach Q2 GDP, which many expect to be flat at best.

 

 EU Summit Calendar

Forex traders will watch the development of the EU summit with big interest today. The Euro is likely to see some volatile swings as murmurs emerge over the details of the discussions and Chinese whispers start to circulate. The market is just as keen to hear of the total amount agreed for a second bailout as the conditions set aside as well as methods of where the cash comes from. There appears to have been an agreement made between eurozone powerheads France and Germany over the terms of the bailout, including rumours that the banking tax issue may have been dropped and this will help to smooth over the talks today. The EU officials arrive at the summit at noon and will be expected to discuss the proposition of a second bailout for Greece for the rest of the afternoon.

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