Release of the marginally improved retail sales had little initial impact

AUD/USD

Range:1.0722 – 1.0779

Support:1.0700

Resistance: 1.0800

Release of the marginally improved retail sales had little initial impact but the aussie did slowly climb to a fresh post float high of $1.0348. Option protection of a $1.0350 barrier clicked in and the pair slipped back to $1.0313, before picking up again towards $1.0340. Stops are reported on a break of the barrier ahead of further barrier talk at $1.0400. Support is reportedly strong towards $1.0275 and the pair is further underpinned by firmer bullion prices. Aussie-yen lost ground on the session after posting a high of Y86.01 on the dollar-yen rally, slipped back to Y85.17 as both components pared back earlier gains, before later recovering to Y85.60.

GBP/USD

Range: 82.57 – 1.6358 – 1.6407

Support: 1.6350

Resistance 1.6430

The focus of attention in the UK this week will be the Inflation Report (Wed) and press conference. What is likely to matter most is whether current market consensus for interest rates (for barely one rate hike by year end) is validated.The Market thinks that it will be validated by the Report suggesting that based upon the market path inflation will return to target over the medium term with balanced risks. By itself, this is likely to be mildly GBP negative as some in the market may consider it confirmation that UK economic prospects have deteriorated.

EUR/USD

Range: 1.4349 – 1.4425

Support: 1.4300

Resistance 1.4450

The euro partially recovered during the Asia session after Friday’s selloff. Friday’s moves were triggered by a report in a German newspaper claiming Greece was considering withdrawing from the Eurozone, and that an emergency meeting of European officials had been called to discuss the issue. A special meeting did take place on Friday night, but participants emphasised that the topic of a potential Greek exit was not discussed. Irish Central Bank Governor Honohan said the growth of Irish debt is an issue, and that the sustainability of that debt depends on Irish growth rates. He stressed however that Ireland would manage to avoid a doomsday scenario. Irish Minister for Energy Rabbitte, said he would like to see an extension in the term of the loans offered to Ireland under the EU/IMF/ECB rescue package. Currently, the average term of maturity of these loans is 7.5 years.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.