EFSF to be leveraged to one trillion euros

German’s Angela Merkel has leaked into the market some crucial details about the upcoming beefed up version of the EU bailout fund, expected to be leveraged to no less than one trillion euros.

EUR/USD

Range: 1.3886 – 1.3927

Support: 1.3860

Resistance: 1.3950

Euro-dollar closed in New York at 1.3928, off session recovery highs of 1.3957. The rate initially edged up to mark highs of 1.3933 in early Asian trading before reversing, some linking the pullback to ratings agency Fitch’s comments that a Greek default was inevitable. The rate made a couple of moves below 1.3900 but was met by decent demand which underpinned overnight trade at the 1.38913 level, with the rate opening Europe back above the figure. It was seen under fresh sell pressure however, which has extended lows to 1.3888. Decent demand interest in place at 1.3860, a break of 1.3850 to open a deeper move towards stronger support into 1.3820. Resistance remains above 1.3950, with stronger interest seen into 1.3960. A break here to open a move towards 1.3970 and the reported barrier at 1.4000.

GBP/USD

Range: 1.5967 – 1.6006

Support: 1.5967

Resistance: 1.6010

Cable closed in New York at 1.5992, off pullback lows of 1.5970 after the rate saw extended highs of 1.6008 during the New York afternoon session. Cable consolidated gains through Asia, with trade contained within a range of 1.5977/1.6007. The rate has come under sell pressure into early Europe, moving below its overnight base as it eases lower in tandem with euro-dollar, the rate extending lows to 1.5969. Resistance is seen into 1.6010, a break to expose further offers reported between 1.6040-1.6050. Support noted at 1.5967, a break to allow for a deeper move towards 1.5930-1.5920 and stronger interest into 1.5900.

Gold

Range: 1,648.26 – 1,659.57

Support: 1,635.60

Resistance:1,665.40

Gold prices were steady yesterday, climbing on the back of a weaker dollar, a sharp rise in crude oil and physical demand out of Asia. It was somewhat weighed down by the lack of safe-haven buying however, as optimism over a concrete solution to the EU debt crisis builds. Gold closed in New York last night at 1,653.75. Asian markets this morning saw an early dip to 1,643.95 before picking up again to 1,659.70. Silver also built higher yesterday from opening levels of 31.37 to 32.04 before closing in New York at 31.75. Asian markets have since picked up again with the metal trading up to 31.89. Support for gold lies at 1,635.60 and 1,612, with resistance at 1,665.40 and 1,677.

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