European woes continue as Merkel discounts a common European Bond

GBP/USD

Range: 1.5452 – 1.5495

Support: 1.5380

Resistance: 1.5650

Sterling is still trading under pressure this morning as the risk trade continues to slide and the market buys US Dollars for safe haven purposes. There is no macro data today so the market will continue to trade on European headlines but technically a close below 1.5545 points to a target of the 2011 low of 1.5270.

EUR/USD

Range: 1.3298-1.3351

Support: 1.3220

Resistance: 1.3450

The bearish sentiment continues into Asia after the US holiday with a bearish article in the FT and a common theme from the European leaders. In the post conference press meeting between Sarkozy, Monti and Merkel the German leader reiterated her negative stance on a common Eurobond and refusal to endorse the ECB as a last resort lender. Attention then turned to an Article in the FT that sighted deterioration in market conditions would make it more difficult to leverage up the EFSF to the levels anticipated by European leaders.

USD/JPY

Range: 77.12-77.55

Support: 76.80

Resistance: 77.80

USD/JPY enjoyed a better session after the Thanks Giving holiday in the US with importers having stronger demand for the pair as is normally the case on a ‘ Gotobi ‘ day. A slide in JGB’s may have also helped the JPY slide but as the European market dominates proceeding Investors may expect rallies to peter out towards 77.80 as Euro/JPY will be the driver of this market.

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