Late Europe took out the1 4250 support on comments from S amp P

EUR/USD

Range:1.4182 – 1.4235

Support:1.4150

Resistance: 1.4250

Late Europe took out the1.4250 support on comments from ‘S&P: possibility Portuguese banks might require more significant government support, this could place downward pressure on sovereign credit ratings. The next support is 1.4150 then the all important 1.4035-40 where we rallied on JCT ‘strong vigilance ‘comment than signaled the ECB rate hike. The Euro market will look towards the announcement of Finland’s stance on the proposed European Union bailout package for Portugal, which has been deferred until this Friday.

GBP/USD

Range: 1.6302 – 1.6378

Support: 1.6250

Resistance 1.6520

The inflation report was deemed hawkish by the market and the market has now started pricing rate hikes for 2011 back in. Today’s data releases are second tier and some investors may feel the UK is no longer a manufacturing sector, as the service sector makes up the majority of UK GDP. The market is likely to be driven by cross flow, led by EUR/GBP.

AUD/USD

Range: 1.0576 – 1.0712

Support: 1.0550

Resistance 1.0750

The AUD bulls were caught off guard overnight over the jobs data release. The employment number came significantly below consensus at -22.1k, with full-time employment down an astonishing 49k. The unemployment rate however, held steady at 4.9%. AUD/USD was sold off 100 pips through the 1.0585 support. The chances of a July hike have not moved from 50% to 30%.

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